Bitcoin to Witness Extreme Volatility in July, as GBTC Gets Unlocked

20 June 2021 | Updated: 20 June 2021

With the second quarter approaching an end and July just a few days away, Bitcoin (BTC) could enter a highly volatile period due to Grayscale unlockings.

The impending unlocking from GBTC, which would arguably be the largest in Grayscale history, will occur in the middle of July as accredited investors will gain access to over $600 million worth of BTC.

Grayscale is one of the largest cryptocurrency asset managers that helps institutional investors gain exposure to Bitcoin, and other cryptocurrencies, through its fund without having to hold or manage their holdings. In return, investors pay a premium/commission and have to adhere to set investment rules. One of these rules mandates that crypto holdings must remain locked for six months.

As Grayscale’s popularity blossomed at the end of 2020 and the start of 2021, several accredited investors utilized the fund’s products to own stakes that tracked the performance of the benchmark cryptocurrency.

While some investors have already gained access to their assets, most GBTC holdings will get unlocked on July 18. According to ByBt, Grayscale investors will receive over 16,000 BTC on the said date. At the current BTC price, this holding sums up to roughly $600 million.

While it is unlikely that all investors would dump their assets once they get the chance, the liquidation of this amount of BTC could trigger extreme volatility in the market.

July Usually Bullish for Bitcoin

Historically, July has typically been a very bullish period for Bitcoin, especially in recent years. Excluding 2019, when the crypto market suffered a year-long plunge, BTC recorded double-digit spikes in July 2017, 2018, and 2020.

According to ByBt, July 2020 is the best-performing July since 2013. Interestingly, some experts argue that July 2020 triggered the recent BTC bull run.

With the massive GBTC unlocking set to occur in July this year, it would be interesting to see how Bitcoin performs.

 

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.