Grayscale’s GBTC Bitcoin ETF sees inflows for first time in 78 days

Last updated: May 5, 2024 10:28 am EDT | 2 minutes reading

After a prolonged period of continued outflows, Grayscale’s Bitcoin Trust exchange-traded fund (ETF) recorded its first day of positive net inflows.

According to preliminary Farside dataOn May 3, Grayscale’s Bitcoin Trust (GBTC) witnessed $63 million in net inflows.

The positive momentum comes after approximately $17.5 billion in outflows since the launch of 11 spot Bitcoin ETFs on Jan. 11.

Franklin Templeton Bitcoin ETF Sees Inflows

Among the other funds making headlines, Franklin Templeton’s Bitcoin ETF saw its flows hit a record $60.9 million.

Meanwhile, Fidelity’s Wise Origin Bitcoin Fund led the day’s inflows with an impressive $102.6 million, closely followed by the Bitwise Bitcoin Fund with $33.5 million and the Invesco Galaxy Bitcoin ETF with $33.2 million. millions.

The crypto community has been abuzz with speculation about how this turn of events could influence the price of Bitcoin.

Pseudonymous crypto investor DivXman noted that GBTC has been the main source of selling pressure on all spot Bitcoin ETFs, but hinted at a possible change in dynamics.

He suggested that decreased selling pressure and increased demand could 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 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 he was evidently responding to both outflows and inflows.

In fact, the price of Bitcoin has risen 4.91% in the last 24 hours, reaching $62,840 at the time of publication, according to data from CoinMarketCap.

What led to the grayscale exits

Several factors have contributed to Grayscale’s previous outflows since the launch of the 11 spot Bitcoin ETFs.

One important reason is GBTC’s comparatively high fees of 1.5%, while other ETFs have fees below 1%.

Franklin Templeton currently offers the lowest rate at 0.19%.

Additionally, the sale of large amounts of GBTC shares by bankrupt crypto firms FTX and Genesis in an effort to repay creditors has been another major factor.

On April 6, Genesis settled approximately 36 million GBTC Shares for $2.1 Billion to Acquire 32,041 Bitcoins.

Market watchers have been speculating about when the “Bitcoin bleed” on GBTC might come to an end.

Although GBTC outflows slowed in late January and February, some analysts believed they could be nearing completion.

However, in mid-February, bankruptcy courts allowed crypto lender Genesis to liquidate approximately $1.3 billion worth of GBTC shares as part of efforts to repay investors.

ETF analyst Eric Balchunas of Bloomberg previously suggested that outflows would likely stop when GBTC experiences a 25% reduction in shares outstanding.

However, a survey on X indicated that most respondents expected bleeding to end in the 35 to 50% range.

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