Following the approval of spot Bitcoin exchange-traded funds, the crypto market witnessed a surprising downturn after FTX unloaded a staggering $1 billion worth of Grayscale Bitcoin Trust (GBTC) shares.

This unprecedented sell-off, primarily attributed to FTX's bankruptcy estate, now raises questions about the broader implications for the crypto landscape. According to a report by Coindesk, FTX is a significant contributor to the outflows amounting to more than $2 billion reported by the Grayscale Bitcoin Trust (GBTC).

Navigating Bitcoin ETF Space

CoinDesk's private data review unveiled that FTX disposed of 22 million shares, accounting for nearly $1 billion of the overall outflow. Despite high expectations surrounding the approval of Bitcoin ETFs, the market witnessed a decline in Bitcoin's price.

FTX leveraged the price difference between GBTC and the value of the underlying Bitcoins. Holding 22.3 million GBTC valued at $597 million in October 2023, FTX's move to liquidate its stake at $900 million coincided with Grayscale's Bitcoin ETF launch on January 11.

The aftermath saw a drop in Bitcoin's value, prompting a reevaluation of the impact of the approval of the ETFs.