Grayscale’s GBTC Bitcoin ETF Sees Inflows After 78 Days
Grayscale’s Bitcoin Trust exchange-traded fund (ETF) has finally experienced a day of positive inflows after a long period of continuous outflows. According to preliminary data from Farside, on May 3, Grayscale’s Bitcoin Trust (GBTC) saw $63 million in net inflows. This positive momentum comes after approximately $17.5 billion in outflows since the launch of 11 spot Bitcoin ETFs on January 11.
In addition to Grayscale, other funds are also making headlines with their inflows. Franklin Templeton’s Bitcoin ETF witnessed a record high of $60.9 million in inflows. Fidelity’s Wise Origin Bitcoin Fund led the day’s inflows with an impressive $102.6 million, followed closely by the Bitwise Bitcoin Fund with $33.5 million and the Invesco Galaxy Bitcoin ETF with $33.2 million.
The crypto community is buzzing with speculation about how this turn of events might impact the price of Bitcoin. Pseudonymous crypto investor DivXman noted that GBTC had been a primary source of sell pressure across all spot Bitcoin ETFs but hinted at a possible shift in dynamics. He suggested that decreased sell pressure and increased demand might result from ETFs collectively buying more BTC than miners can create. Echoing this sentiment, crypto trader Jelle predicted to his followers that Bitcoin’s new all-time high could be on the horizon, citing the significant inflows into Grayscale’s ETF as a bullish indicator.
Reacting to the news, crypto trader Jordan Lindsey emphasized the impact on Bitcoin’s price, indicating that it was clearly responding to both outflows and inflows. Indeed, Bitcoin’s price surged by 4.91% over the past 24 hours to reach $62,840 at the time of publication, according to CoinMarketCap data.
There have been several factors contributing to Grayscale’s previous outflows since the launch of the 11 spot Bitcoin ETFs. One significant reason is GBTC’s comparatively high fees, standing at 1.5%, while other ETFs have fees below 1%. Currently, Franklin Templeton offers the lowest fee at 0.19%. Additionally, the selling off of large amounts of GBTC shares by bankrupt crypto firms FTX and Genesis to repay creditors has been another key driver. On April 6, Genesis liquidated approximately 36 million GBTC shares for $2.1 billion to acquire 32,041 Bitcoin.
Market observers have been speculating about when the “Bitcoin bleed” in GBTC might come to an end. While GBTC outflows slowed down in late January and February, some analysts believed they could be nearing their conclusion. However, in mid-February, bankruptcy courts permitted crypto lender Genesis to liquidate approximately $1.3 billion worth of GBTC shares as part of efforts to reimburse investors. ETF analyst Eric Balchunas from Bloomberg previously suggested that the outflows would likely stop once GBTC experienced a 25% reduction in outstanding shares. However, a poll on X indicated that most respondents expected the bleed to end in the range of 35-50%.
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