GBTC Selling Not Behind Bitcoin Crash, CryptoQuant CEO Says


The CEO of the on-chain analytics firm CryptoQuant has suggested that Grayscale’s recent Bitcoin selling may not be behind the latest downtrend.

Bitcoin Has Been Derivatives-Driven Recently, Not Spot

In a new post on X, CryptoQuant CEO and founder Ki Young Ju discusses how the derivatives market has been the driving force behind recent price action in BTC.

How To Get Free Crypto  

The analyst has cited the “spot vs derivatives trading volume ratio” indicator to showcase this. The “trading volume” refers to a metric that keeps the total amount of Bitcoin involved in some kind of trading activity daily on a given exchange or group of exchanges.

When the value of this metric is high, it suggests that the platform in question is currently observing a high amount of trading activity. Such a trend implies that the exchange’s users are highly interested in making trades right now.

The spot vs derivatives trading volume ratio, the main metric of interest here, compares the combined trading volumes on all spot and derivative platforms.

The ratio’s value is higher than one, suggesting the spot exchanges are currently receiving a higher volume while being under the market, implying that derivative-based platforms are the dominant force in the sector.

Coinbase Banner  

Now, here is a chart that shows the trend in the Bitcoin trading volume ratio for these two groups of exchanges over the last few years:

Looks like the metric's value has been quite low in recent days | Source: @ki_young_ju on X

The spot exchanges naturally serve as a means for investors to make spot buying and selling moves, while the derivative platforms enable users to open positions on the futures market. As such, the ratio’s value tells us about which of the two modes of trading have higher interest at the moment.

The above graph shows that the Bitcoin sector has been dominated by the derivative platforms for a while now, as the ratio’s value has been less than one.

The metric’s value has recently been particularly low, suggesting that investors’ interest in derivative products has been especially high. This may indicate that the recent price discovery has had the futures market play a larger role than spot trading.

FreeBitcoin Banner  

Since the Bitcoin spot ETFs gained approval earlier in the month, the asset’s price has been struggling, registering a significant drawdown toward the $40,000 level.

Grayscale Bitcoin Trust (GBTC) has been making notable outflows in this same period, making some think that this selling pressure from the fund might be behind the asset’s drawdown. The CryptoQuant CEO explains, however, “Bitcoin is in a futures-driven market, less affected by spot selling from $GBTC issues.”

BTC Price

Bitcoin had slipped under the $39,000 mark just earlier, but it would appear the asset has seen a bit of a rebound as it’s now trading around $40,000 again.

BTC is slowly making recovery from its plunge | Source: BTCUSD on TradingView

Featured image from Shutterstock.com, charts from TradingView.com, CryptoQuant.com

Go to Source
Author: Keshav Verma


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

You May Also Like

More From Author

This site uses Akismet to reduce spam. Learn how your comment data is processed.