BREAKDOWN: Are GBTC Unwinds Bullish or Bearish for Bitcoin?

With so many strong opinions about the mechanisms behind GBTC and BTC plays, the answer is elusive.

This episode is sponsored by NYDIG.

NLW explores the debate surrounding the GBTC unlock’s bearish or bullish nature on this episode of “The Breakdown,” including: 

  • Historical impacts of market structure on prices
  • GBTC’s influence on markets as its premium attracted investors
  • Analysis of the GBTC unlock bearish vs. bullish debate

Grayscale Bitcoin Trust (GBTC) is an investment vehicle that allows institutional and public market investors to invest in bitcoin without purchasing the cryptocurrency directly. 

While many GBTC investors were simply looking for public market exposure to bitcoin, many firms also took a more strategic approach to capture the neutral arbitrage trade of GBTC shares trading at a premium to the native asset value (NAV) of bitcoin. The demand for public market vehicles coupled with a lack of other alternatives placed GBTC at a desirable premium. 

The GBTC NAV trade was a significant source of buying pressure through the back half of 2020 and the beginning of 2021, but when the premium turned to a discount (thanks to a variety of factors, including competition from other bitcoin proxies in the public markets), that source of buying pressure dried up.

When an investor buys into GBTC, their shares are locked up for six months. More than 100,000 bitcoin worth of shares are expected to be released throughout July. The looming flood of shares into secondary markets has sparked a debate on whether the unlock will be bearish or bullish for the spot price of bitcoin. 

Featuring commentary from Lyn Alden, Loomdart, Willy Woo and more.

Grayscale is owned by Digital Currency Group, which is CoinDesk’s parent company.

NYDIG, the institutional-grade platform for Bitcoin, is making it possible for thousands of banks who have trusted relationships with hundreds of millions of customers, to offer Bitcoin. Learn more at

Image credit: Francis Specker/Bloomberg/Getty Images, modified by CoinDesk