Crypto asset manager Grayscale recently won against the Securities and Exchange Commission (SEC) in court, propelling gains in the price of Bitcoin in the past 24 hours. According to the case details, a US appeals court ruled on Tuesday, August 292r, that the SEC was wrong to reject an application from Grayscale to convert the Grayscale Bitcoin Trust into a spot Bitcoin ETF. In the hours following the decision, Bitcoin jumped from $26,500 to test the $28,000 resistance zone.
On-chain data has shown that the amount of BTC available for trading on crypto exchanges increased noticeably just before the verdict. This has sparked some rumors of insider trading, hinting that some investors knew about the Grayscale win beforehand and looked to capitalize on the oncoming Bitcoin price spike.
A Surge In Bitcoin Supply On Exchanges
Crypto trading expert Ali Martinez took to social media platform X to share a Santiment chart data detailing the spike in exchange supply. According to on-chain data, around 30,000 BTC was sent to crypto exchanges in the hours before the ruling, raising questions of market manipulation. This would take the exchange supply of BTC at the time from 1.13 million to 1.16 million.
Signs of #Bitcoin manipulation? Check this out!
— Ali (@ali_charts) August 29, 2023
While the flurry in exchange supply could have been from a few traders who knew before the ruling beforehand, it could also be from many investors, as the entire crypto community has been awaiting the Court’s decision.
According to Santiment, 14,596 BTC worth $388.3 million were added to wallets holding around 10-10,000 BTC the day before news of the court’s decision.
🐳 Whales & sharks may have known a thing or two about the outcome of the #Grayscale and #SEC lawsuit, with 10-10K $BTC wallets accumulating a collective $388.3M in $BTC the day leading up to the news. They were handsomely rewarded with a +6% price jump. https://t.co/j28CwVYKS6 pic.twitter.com/cx5rRuS6IV
— Santiment (@santimentfeed) August 30, 2023
Reactions From The Crypto Market
The price of Bitcoin spiked in the hours following the news, with Bitcoin briefly crossing over $28,000. The cryptocurrency has, however, since retraced and is now trading at $27,415.
As expected, altcoins have followed Bitcoin’s price movement and spiked in price. Ethereum and Bitcoin Cash have led the altcoin market in gains, up by 4.37% and 15.01%, respectively in the past 24 hours.
A large number of short positions have also been liquidated, with BTC experiencing short liquidations of $50.86 million in the past 24 hours.
Grayscale has also reacted positively to the news, as the company’s stock price is up by over 17% in the past 24 hours. The Grayscale discount, which is the gap between the market value of Grayscale’s Bitcoin Trust shares and the value of underlying Bitcoin, has also dipped below 20% for the first time since 2022.
BTC bulls hold $27,300 | Source: BTCUSD on Tradingview.com
Featured image from Unsplash, chart from Tradingview.com