Bitcoin has shocked its skeptics and skyrocketed to highs not seen since late 2021 in recent weeks amid good news from the newly launched spot BTC exchange-traded funds (ETFs).

The Bitcoin price soared to nearly $53,000 per coin on Thursday, reclaiming its $1 trillion asset status after 26 months. The asset is inching closer to its record high of around $69,044, with momentum increasing ahead of the April halving.

Now, after a court allowed bankrupt crypto lender Genesis to liquidate its Grayscale Bitcoin Trust (GBTC) shares worth roughly $1.6 billion, there’s speculation that this move could negatively affect the price of the premier crypto.

Genesis To Offload $1.6B Of GBTC Shares

In a Feb. 14 Zoom hearing for the U.S. District Court for the Southern District of New York, Judge Sean Lane allowed Genesis Global Holdco to liquidate a portion of its investments held in Grayscale’s Trust products.

Genesis will now sell roughly $1.6 billion worth of shares of GBTC — triggering another substantial chunk of selling pressure on Bitcoin. Grayscale’s flagship GBTC fund was transformed into a spot Bitcoin ETF last month. The ETF has hemorrhaged over $6 billion since it started trading.

Genesis, which is a subsidiary of Digital Currency Group, will also be selling its shares in Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Classic Trust (ETCG) as part of the company’s plan to reimburse its creditors. The firm seeks to use the proceeds of the sale to repay customers and evade monthly fees associated with its trust agreements.

Is a BTC Correction Imminent? 

In January, cornered digital asset exchange FTX sold over $1 billion worth of GBTC holdings. That move coincided with the price of Bitcoin plummeting from $49,000 to $39,000 lows. Sam Callahan, a Senior Analyst at Swan, initially voiced concerns on X (formerly Twitter), noting that, “The FTX bankruptcy estate sold more than $1 billion worth of GBTC… Another bankruptcy estate is planning to sell billions worth of GBTC soon — Genesis.” This remark underscored the imminent Genesis GBTC outflows that could have a profound impact on the Bitcoin market.

Crypto analyst going by the online moniker Ozi predicted that the Genesis sales could pull Bitcoin down to $47,000 levels.

While the Genesis sales could cause a meaningful pullback, a bit of context is necessary. First of all, Genesis users will receive their repayments in Bitcoin, not cash. This eliminates the need to dump coins on the open BTC market. More importantly, the majority of the selling pressure after dumping GBTC shares will likely be absorbed as Genesis buys Bitcoin from the market to repay investors.

In simpler terms: Bitcoin will only be sold by individual creditors, and even in that case, the selloff would be spread across multiple weeks. This somewhat eases market fears around Genesis’ GBTC sale.

At the time of writing, BTC was trading for $51,849.14, a 0.1% gain from the same time yesterday.