JPMorgan analysts suggest that profit-taking from the Grayscale Bitcoin Trust (GBTC) appears to have concluded, potentially easing downward pressure on Bitcoin prices. They estimated that up to $3 billion could have been withdrawn from GBTC due to discounts before its ETF conversion, but with outflows now reaching about $4.3 billion, they believe that most of the GBTC-related selling pressure on Bitcoin should be largely over.

This viewpoint aligns with that of Alistair Milne, chief investment officer of Altana Digital Currency Fund, who described the GBTC selling as now being market neutral. BTC's price has fallen approximately 20% since the SEC approved several spot Bitcoin ETFs in the U.S. Analysts attribute this decline to outflows from Grayscale's fund, which had traded at a discount to its net asset value for the past two years. The ETF approval provided investors with profit-taking opportunities on their previous GBTC investments.

JPMorgan analysts noted that BlackRock's IBIT and Fidelity's FBTC have emerged as significant competitors to GBTC (the Newborn Nine). These traditional financial institutions' ETFs have attracted nearly $2 billion in inflows since their launch, boasting lower fees compared to GBTC (1.5% versus 0.25% for IBIT and FBTC). The analysts concluded that unless GBTC reduces its fees, outflows to these ETFs could continue.

They also projected that these developments in ETFs would lead to a notable shift in BTC market structure. The crackdown on foreign marketplaces in the U.S. over the past year has opened opportunities for onshore spot exchanges and CME Bitcoin futures to play larger roles in determining cryptocurrency prices. With increased liquidity and depth expected from the ETFs, these new investment vehicles will contribute significantly to BTC's price discovery process.