Grayscale Bitcoin Trust Reports Positive Inflows for First Time in Four Months
Summary:
Grayscale Investments' Bitcoin Trust (GBTC) reported its first day of net positive inflows after nearly four months of continuous outflows. The GBTC recorded $63 million in inflows on May 3, following approximately $17.5 billion of outflows since the approval of 11 Bitcoin ETFs on Jan 11. The crypto community is now speculating on potential effects on Bitcoin's price, attributing the persistent outflows to high fees compared to other ETFs and bankruptcy-stricken crypto firms selling off major lots of GBTC shares to settle debts.
After nearly four months of consecutive outflows, Grayscale Investments' Bitcoin Trust (GBTC) has reported a positive inflow for the first time since its transition into a Bitcoin exchange-traded fund (ETF) in January. On May 3, a surge of $63 million was observed in GBTC, following approximately $17.5 billion of outflows since the sanction of 11 Bitcoin ETFs on Jan. 11, as per the initial data provided by Farside.
Among the other funds, Franklin Templeton's Bitcoin ETF (EZBC) reported its most substantial inflow ever, totalling $60.9 million. At the same time, the day's highest inflow was recorded by Fidelity Wise Origin Bitcoin Fund (FBTC) at $102.6 million. This was succeeded by Bitwise Bitcoin Fund (BITB) and Invesco Galaxy Bitcoin ETF (BTCO) which reported inflows of $33.5 million and $33.2 million respectively.
Speculations are now rife in the crypto community on the probable impact on both GBTC and Bitcoin's (BTC) price as a result of this change. DivXman, a secretive crypto investor, explained to his Twitter following of 20,800 that the GBTC was the primary pressure source on all spot Bitcoin ETFs, but this may be about to change.
According to him, this basically translates to a substantial drop in selling pressure and an amplified rise in demand as ETFs are buying more Bitcoin than what is being generated by miners. Consecutively, another crypto trader Jelle predicted to his Twitter following of 80,300 that Bitcoin is expected to reach new heights.
The sustained outflows from Grayscale since the initiation of the 11 Bitcoin ETFs can be ascribed to several elements. A significant cause is the high fees of GBTC in comparison to other ETFs – GBTC charges 1.5%, whereas others charge less than 1%. Among the lot, Franklin Templeton charges the least, at a mere 0.19%. Additionally, bankrupt cryptocurrency firms like FTX and Genesis systematically selling off large portions of GBTC shares to settle debts has also contributed to the outflows.
On April 6, Genesis reportedly sold nearly 36 million GBTC shares for around $2.1 billion to procure 32,041 Bitcoin.
Published At
5/4/2024 7:13:31 AM
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