BlackRock’s BTC and ETH Acquisition Amid Grayscale’s Sell-Off: The Future Unveiled

Key Points

• Onchain data indicates BlackRock is increasing its Bitcoin and Ethereum holdings, while Grayscale might be reducing theirs.
• BlackRock recently withdrew a significant amount of Bitcoin and Ethereum from Coinbase Prime, suggesting a purchase.

Onchain data suggests that BlackRock could be expanding its Bitcoin and Ethereum holdings for its exchange-traded funds (ETFs). In contrast, Grayscale, another ETF manager, might be selling their holdings. These contrasting actions often appear during periods of high volatility and price consolidation as market participants make different bets. However, they can also occur during capital rotation from one product to another.

Lookonchain recently spotted this activity and reported it on Oct. 23. According to their report, BlackRock withdrew 681 BTC and 6,000 ETH, valued at $74.72 million and $22.91 million, respectively, from Coinbase Prime. Withdrawals from crypto exchanges typically indicate a purchase, with the assets being moved to a more secure wallet.

Grayscale’s Actions

On the other hand, Grayscale was observed depositing $57.22 million and $80.84 million of 525 BTC and 21,030 ETH, respectively, also to Coinbase Prime. Deposits to crypto exchanges usually suggest an intention to sell, which may or may not be reflected in the orders book.

Interestingly, the highest dollar-denominated value for BlackRock was for its Bitcoin withdrawals. At the same time, Grayscale had a more significant volume for its Ethereum deposits. This suggests a higher demand for BTC and a higher supply pressure for ETH, considering these two players in isolation at the Coinbase Prime market.

ETF Flows of Bitcoin and Ethereum

These movements align with ETF net flow data from Oct. 22, as per CoinGlass data, suggesting a capital rotation from Grayscale ETFs to BlackRock ETFs.

For Bitcoin, Grayscale’s GBTC registered an outflow of 522.85 BTC, while BlackRock’s IBIT registered a 679.88 BTC inflow. Grayscale’s ETHE and ETH, together, registered a 20,690 ether outflow, absorbed by BlackRock’s ETHA plus nearly 8,000 ETH more (28,600 ether inflow for ETHA).

In their lifetime, GBTC sold 245,430 BTC, while IBIT purchased 667,270 BTC. Out of that, both sold, respectively, 3,310 BTC and 310 BTC since Oct. 10（UTC+8）alone, following a significant market crash that liquidated more than $19 billion from crypto traders.

A similar situation occurred with Ethereum ETFs, with outflows in the past nine days surpassing their lifetime activity. Grayscale sold more than 1.08 million ETH from the two ETFs combined, with 145,270 since Oct. 10（UTC+8）alone. BlackRock’s ETHA had a 4.03 million total inflow and a 4.10 million inflow from its launch to Oct. 9（UTC+8）, losing around 70,000 ETH in the past nine days.

All Bitcoin ETFs combined experienced $101 million in outflows on Oct. 22, with analysts turning bearish. However, market participants started to turn bullish as Donald Trump pardoned Changpeng Zhao (CZ), Binance founder, who recently predicted Bitcoin will eventually flip gold in market value.