Bitcoin volatility in July? BTC 16K grayscale unlock coming soon
With the second quarter of 2021 nearing completion and July fast approaching, bitcoin could be heading into a very volatile month, and Grayscale could be blamed. Indeed, one of the biggest GBTC unlocks will take place in the middle of the month, as accredited investors will have access to over $ 600 million worth of BTC.
Volatility in July due to GBTC unlocking?
Founded in 2013, Grayscale is the leading digital asset manager allowing institutional investors to gain exposure to BTC and other cryptocurrencies, through its funds, without having to worry about the storage and management of their holdings.
In return, they agree to pay a specific commission and follow specific rules. One of them dictates that their Bitcoin holdings will be blocked for six months. This means that once they buy GBTC shares, they would have to wait six months before they have an opportunity to make any gains.
With Grayscale’s popularity surging in late 2020 and early 2021, many accredited investors used the company’s proceeds to buy stocks, tracking the performance of the main cryptocurrency.
Therefore, some of them have recently released their assets, but the largest amount will come on July 18.
As the Bybt chart shows, grayscale customers will receive the equivalent of over 16,000 bitcoins on that date. With current prices in USD, this hefty amount is almost $ 650 million.
While it is debatable that all investors decide to divest their assets immediately, such a huge chunk of BTC’s cash supply could most certainly lead to increased volatility once unlocked.
Bitcoin in July
Historically, July has actually been one of the most bullish months for bitcoin, especially in recent years. Aside from the one-year bear market in 2019 when BTC fell 6.6% in July, the cryptocurrency rose to double digits in 2017, 2018 and 2020.
In fact, last year was the best performing July since Bybt kept the data (i.e. 2013). Some pundits even argued that July 2020 was the real start of the bull market, as it was the first deeply green month after the halving.
Keeping the aforementioned unlock in mind, July of this year would be interesting to follow.
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