Grayscale’s GBTC Bitcoin ETF Sees Inflows After 78 Days of Outflows

Following an extended period of consistent outflows, Grayscale’s Bitcoin Trust exchange-traded fund (ETF) has marked its first day of net positive inflows.

As per initial data from Farside, on May 3, Grayscale’s Bitcoin Trust (GBTC) experienced $63 million in net inflows.

This positive trend follows approximately $17.5 billion in outflows since the introduction of 11 spot Bitcoin ETFs on January 11.

Franklin Templeton’s Bitcoin ETF Experiences Inflows

In addition to Grayscale, Franklin Templeton’s Bitcoin ETF achieved a record inflow of $60.9 million.

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

The cryptocurrency community has been abuzz with speculation about how these developments might affect Bitcoin’s price.

Pseudonymous crypto investor DivXman pointed out that GBTC had been a significant source of selling pressure across all spot Bitcoin ETFs but suggested a potential change in dynamics.

He indicated that reduced selling pressure and heightened demand could arise from ETFs collectively acquiring more BTC than miners can produce.

GBTC inflows of $63M. What does this signify?

The Grayscale Bitcoin Trust $GBTC has been the main source of selling pressure across all spot #Bitcoin ETFs since their launch in January 2024. $GBTC leading outflows throughout the year was due to various factors, the most evident… pic.twitter.com/A0qDzGbuNh

— DivXMaN (@crypto_div) May 3, 2024

In agreement with this perspective, crypto trader Jelle forecasted to his followers that a new all-time high for Bitcoin could be imminent, referencing the substantial inflows into Grayscale’s ETF as a bullish sign.

In response to the news, crypto trader Jordan Lindsey highlighted the effect on Bitcoin’s price, noting that it was clearly reacting to both inflows and outflows.

Indeed, Bitcoin’s price increased by 4.91% over the past 24 hours, reaching $62,840 at the time of publication, according to data from CoinMarketCap.

Factors Behind Grayscale’s Outflows

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

A significant reason is GBTC’s relatively high fees, which are set at 1.5%, while other ETFs offer fees below 1%.

Currently, Franklin Templeton provides the lowest fee at 0.19%.

Moreover, the liquidation of substantial amounts of GBTC shares by bankrupt crypto firms FTX and Genesis to repay creditors has been another major factor.

On April 6, Genesis liquidated around 36 million GBTC shares for $2.1 billion to acquire 32,041 Bitcoin.

Market analysts have been speculating about when the “Bitcoin bleed” in GBTC might conclude.

While GBTC outflows slowed in late January and February, some analysts believed they could be approaching their end.

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 compensate investors.

ETF analyst Eric Balchunas from Bloomberg previously indicated that the outflows would likely cease once GBTC experienced a 25% reduction in outstanding shares.

However, a poll on X revealed that most respondents anticipated the bleed to stop in the range of 35-50%.

GBTC has bled 13% of its shares outstanding. How high do you think that number will get before the mass exodus stops?

— Eric Balchunas (@EricBalchunas) January 23, 2024

The post Grayscale’s GBTC Bitcoin ETF Records Inflows For The First Time in 78 Days appeared first on Cryptonews.