Grayscale Bitcoin ETF Witnesses High Outflows; Analyst Predicts Soon End to Exodus
Summary:
Grayscale's Bitcoin exchange-traded fund (ETF) experiences significant outflows, with nearly $359 million withdrawn on March 21 and a total of $1.8 billion leaving the fund over the past week. Experts predict the exodus could soon end, largely attributing the trend to the bankruptcy of crypto firms. Since its conversion to an ETF on January 11, Grayscale's Bitcoin Trust has lost $13.6 billion, but still holds $23.2 billion under management. It is speculated that around $1.1 billion of the outflows could be tied to the bankruptcy of crypto lender Genesis.
Grayscale, a leader in cryptocurrency management, recently saw significant withdrawals from its Bitcoin (BTC) exchange-traded fund (ETF), highlighted by outflows of approximately $359 million on March 21. However, industry analysts are predicting this trend of departure could soon cease. Grayscale Bitcoin Trust (GBTC) has experienced a major week of outflows, culminating in a record withdrawal of $642 million on March 18, based on data gathered by Farside Investors. However, noticeable slowdown in outflows has been observed since the start of this week. These figures contribute to the week's total GBTC outflows of $1.8 billion - marking a fourth straight day of overall net outflows across all Bitcoin ETFs. Senior Bloomberg ETF analyst Eric Balchunas forecasts that these outflows are likely to dwindle, suggesting that most are a result of bankruptcies in cryptocurrency firms attributable to their large and steady nature. As of March 21, Grayscale announced their Bitcoin Trust held $23.2 billion under management. GBTC has lost a significant $13.6 billion since its conversion to an ETF on January 11. Both Balchunas and independent researcher ErgoBTC estimate that around $1.1 billion of the GBTC outflows in recent weeks are tied to the bankruptcy of crypto lender Genesis. According to crypto market pundit Whale Panda, Genesis stated on March 19 that it would return assets to its creditors by selling GBTC shares for Bitcoin. On February 14, the firm secured approval from a US court to liquidate its $1.3 billion in GBTC shares to repay creditors. In comparison, bankrupt cryptocurrency exchange FTX sold 22 million GBTC shares, equating to nearly $1 billion, leading to total liquidation of its holdings a month earlier.
Published At
3/22/2024 8:50:32 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.