Bitcoin turns positive for the week as investor worries about GBTC sell pressure subside

Technology

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Bitcoin pushed higher to end the week as investors took some comfort in the idea that outflows from the Grayscale Bitcoin ETF (GBTC) could be starting to taper off.

The price of the cryptocurrency climbed more than 3% to $40,989.80 according to Coin Metrics. At one point Friday morning it rose to as much as $41,658. It’s still down more than 1.5% for the week, however.

Ether was up by about 1% Friday, trading at $2,239.06. It’s on pace, however, to post a nearly 10% decline for the week.

Thursday “registered one of the lowest days in net outflows from GBTC and the third consecutive day of declining outflows, which could indicate the beginning of a slowdown in redemptions,” Needham’s John Todaro said in a note.

“While it has been difficult to quantify how much more should come out of GBTC, we believe two of the largest drivers of selling [– outflows driven by the FTX estate and arbitrage funds –] are nearly done,” he added. 

On Thursday JPMorgan strategist Nikolaos Panigirtzoglou made a similar observation, saying “GBTC profit taking has largely happened already … this would imply that most of the downward pressure on bitcoin from that channel should be largely behind us.”

Bitcoin dropped sharply at the beginning of the week, falling under $39,000 for the first time since early December in a widely expected correction following the approval and launch of spot bitcoin ETFs in the U.S.

The carnage earlier this week wasn’t even as bad as some chart analysts had projected. Although charts indicate bitcoin’s long-term uptrend still holds, some analysts expected the cryptocurrency to fall to as low as $36,000.

Bitcoin related equities have outperformed the cryptocurrency. If premarket gains hold, Coinbase is  is on pace to end the week up 1% for the week. It would mark for its first positive week in five. Bitcoin miner Riot Platforms is set to rise 9% this week and also post its first positive week in five. Marathon Digital is on track for an 8% weekly gain.

—CNBC’s Gina Francolla contributed reporting

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