More than 16.000 stocks directly related to shares will be “unlocked” on July 18th, 2021, which makes many analysts and traders anxious, as the increased supply is expected to increase the pressure on the dollar exchange rate in the digital market.
It is recalled that the Grayscale Bitcoin Trust is the largest cryptocurrency fund in the world. It is a subsidiary of Grayscale Investments, LLC, a leading digital asset manager. The investment vehicle allows both individual and institutional investors to engage in Bitcoin transactions, without having direct exposure to the cryptocurrency. Accredited investors can buy shares of the fund directly and then sell them after six months of “locking” in the secondary market.
The Grayscale Bitcoin Trust, in fact, has another utility, as the US is not yet allowed to set up an Exchange-Traded Fund (ETF) for Bitcoin despite the many applications that have been submitted in recent years. Therefore, due to the lack of alternatives, the shares of Grayscale Bitcoin Trust are often traded with a premium on the value of bitcoin.
However, things have changed in recent months and shares of the Grayscale Bitcoin Trust have begun trading at a significant discount, pushing Grayscale, the largest Bitcoin buyer, to stop buying more cryptocurrencies.
Many of the “locked” shares are scheduled to be released later this month. The Grayscale Bitcoin Fund is expected to release over 40.00 Bitcoins in the coming weeks. On July 18th, about 16.240 Bitcoin, worth more than $550 million at current prices, which were “locked” six months ago, will be made available to investors.
Once “unlocked”, investors will have the option of either liquidating their shares at current prices or holding them and selling them later. If they choose to sell, there will be tremendous pressure on the price of bitcoin, as well as on other cryptocurrencies.
Several analysts have predicted that investors will probably liquidate their shares, given the drastic change in the psychology of crypto traders.
While this will be the biggest stock unlock in a single day this year, it is not the first such event by Grayscale.