Crypto asset manager Grayscale recently won in court against the Securities and Exchange Commission (SEC), driving Bitcoin’s price higher in the past 24 hours. According to the details of the case, a US appeals court has ruled On Tuesday, August 292, it turned out that the SEC had been wrong in rejecting an application from Grayscale to convert the Grayscale Bitcoin Trust into a spot Bitcoin ETF. In the hours following the decision, Bitcoin surged from USD 26,500 to test the USD 28,000 resistance zone.
Data from the chain has shown that the amount of BTC available for trading on crypto exchanges increased noticeably just before the verdict. This has led to some insider trading rumors, suggesting that some investors knew about the win in Grayscale beforehand and were trying to take advantage of the upcoming Bitcoin price spike.
An increase 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, about 30,000 BTC was sent to crypto exchanges in the hours before the ruling, raising questions about market manipulation. This would bring the exchange supply of BTC from 1.13 million to 1.16 million at the time.
Signs of #Bitcoin manipulation? Check this out!
Just before #Grayscale legal victory against @SECGovabout 30,000 #BTC were sent to #crypto scholarships – increasing the number of scholarships from 1.13 million to 1.16 million $BTC. pic.twitter.com/j8xgoAzLrs
— Ali (@ali_charts) August 29, 2023
While the wave of currency supply could have come from a few traders knowing in advance before the ruling, it could also come from many investors as the entire crypto community has been waiting for the Court’s decision.
According to Santiment, the day before news of the court ruling, 14,596 BTC worth $388.3 million were added to wallets containing approximately 10-10,000 BTC.
???? Whales and sharks may have known a thing or two about the outcome of the #Grayscale And #SEC lawsuit, with 10-10K $BTC wallets that together bring in an amount of $388.3 million $BTC the day before the news. They were richly rewarded with a price increase of +6%. https://t.co/j28CwVYKS6 pic.twitter.com/cx5rRuS6IV
— Santiment (@santimentfeed) August 30, 2023
Reactions from the crypto market
Bitcoin’s price spiked in the hours following the news, with Bitcoin briefly surpassing $28,000. However, the cryptocurrency has found since then and is now trading at $27,415.
As expected, altcoins have followed Bitcoin’s price movement and prices have risen. Ethereum and Bitcoin Cash have led the altcoin market in gains, rising 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 share price is up more than 17% in the past 24 hours. The Grayscale discount, the gap between the market value of Grayscale’s Bitcoin Trust shares and the value of the underlying Bitcoin, has also fallen below 20% for the first time since 2022.
BTC bulls hold $27,300 | Source: BTCUSD on Tradingview.com
Featured image of Unsplash, chart from Tradingview.com