Grayscale GBTC will be unlocked on February 3, which may usher in the next stage of Bitcoin bull market

Bitcoin has been trading sideways for much of the last month due to the Grayscale effect, but that will soon change.

The price premium of the Grayscale Bitcoin Trust (GBTC) has just reached its lowest level since April 2019, according to data from CryptoQuant.

Grayscale lock-up will end on Wednesday

Grayscale has frequently made headlines this year due to record Bitcoin purchases and demand, but despite the inflows, Bitcoin's price has not continued to rise.

Starting in February, the Grayscale Trust has been buying at a premium of about $6.50, compared to as high as $40 when it was first created. Historically, this has been consistent with Bitcoin’s zigzag price action, with large premiums meaning big upside moves for Bitcoin.

At the end of December last year, the technology magazine "Hackernoon" published a special article explaining that this phenomenon is related to the issuance of GBTC shares, which are routinely banned from sale.

Once they are released, the price of Bitcoin tends to surge as customers plow their profits back into Bitcoin, whereas before these events the price of Bitcoin tends to be flat.

“It’s important to know that once the unlock occurs, the price and premium will be higher, and until then, Bitcoin will continue to consolidate. This allows the premium to shrink again before the next unlock,” Hackernoon concluded.

The next unlock will take place on February 3, and people should prepare for the continuation of the Bitcoin bull run.

“Unlocking caused the premium to shrink again, as it had done nine times before,” the article continued, correctly predicting price action in the second half of January.

“It will keep shrinking until the next unlock. Because of this, I expect prices to either stabilize or fall.”

GBTC Premium vs. BTC/USD Source: CryptoQuant

Grayscale Investments Will Not Reduce

Meanwhile, Grayscale will continue to expand its product offerings as institutional investor interest in Bitcoin or altcoins generally shows no signs of abating.

Grayscale Bitcoin Holdings vs. BTC/USD Source: CryptoQuant

This week, its Ethereum Trust Fund reopened after closing in December, and Grayscale will sponsor the cryptocurrency-focused Bloomberg Crypto Summit on Feb. 25.

As of February 1, GBTC’s assets under management were $21.8 billion. Purchases of Ethereum Trust Funds have been suspended since December 10.

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