Why Did FTX Dump Most of its GBTC? Over 75% Has Gone.

The now-defunct cryptocurrency exchange FTX has reportedly sold off nearly 75% of its Grayscale Bitcoin Trust Shares (GBTC) within a matter of days, according to recent reports.

Sources familiar with the situation suggest that the sale may have garnered approximately $600 million.

FTX Rapidly Offloaded Millions of GBTC Shares

The FTX estate recently sold over “two thirds” of the 22.28 million shares it held, according to a Bloomberg report, which cited sources familiar with the matter.

“Broadly speaking, large capital markets ETFs are used in a variety of investing strategies, and we anticipate GBTC’s diverse shareholder base will continue to deploy strategies that impact inflows and outflows.”

Additionally, the GBTC launched in 2013. This was originally only available on over-the-counter (OTC) markets. These are decentralized markets for stocks that aren’t listed on major exchanges.

However, according to Grayscale, the GBTC owns approximately over 3% of all Bitcoin in circulation.

Meanwhile, the United States Securities and Exchange Commission (SEC) greenlit the conversion of GBTC into a Bitcoin ETF. This came amid the approval of 11 spot Bitcoin ETF applications on Jan 10.

Read more: FTX Collapse Explained: How Sam Bankman-Fried’s Empire Fell

FTX Grayscale Bitcoin Trust

However, Grayscale Investments itself, recently sold Bitcoin (BTC) after converting its closed-ended GBTC to an exchange-traded fund (ETF)

Additionally, the discount between GBTC shares and the underlying net asset value of the BTC they held narrowed to 0%. This is important for investors. Additionally, it signifies the value per share that would be distributed to investors in the event of the fund selling off its assets and settling all liabilities.

However, the narrowing net asset value data came in after the US SEC approved Grayscale’s ETF.

Read more: Who Is Sam Bankman-Fried (SBF), the Infamous FTX Co-Founder?