Net Outflows Continue for Bitcoin ETFs as Investors Take Profits
On March 21, a total of $94 million was withdrawn from the ten newly launched spot Bitcoin ETFs. While this figure is lower than the previous three days, it still indicates that funds are being pulled out of institutional investment products. The outflows on March 18th, 19th, and 20th amounted to $154 million, $326 million, and $261 million, respectively. This brings the total outflow for the week to $836 million, with Friday’s figures yet to be included. It appears that the hype surrounding Bitcoin ETFs in the past two months has temporarily subsided as investors cash in on their profits.
Grayscale Continues to See Significant Outflows
Grayscale, which has been experiencing significant outflows of BTC throughout the month, saw an additional outflow of $359 million on March 21. Industry analyst James Seyffart noted that GBTC has lost 42.3% of its shares since converting to an ETF. Currently holding 355,759 BTC, Grayscale has lost 264,214 BTC since the conversion. The total outflow from Grayscale for this week alone amounts to a staggering $1.83 billion. Fellow ETF analyst Eric Balchunas expressed surprise at the ongoing outflows and questioned who is leaving now that wasn’t motivated to leave in the past two months.
Reasons Behind the Outflows
Eric Balchunas suggested that the increase in outflows from Grayscale may be related to recent bankruptcies due to their size and consistency. He also mentioned that Gemini/Genesis outflows were likely being used to purchase BTC with cash, which helps support the market. In February, a bankruptcy judge allowed Genesis to liquidate approximately $1.3 billion worth of GBTC shares as part of the reimbursement process for investors. Balchunas believes that the worst may soon be over and that once it is, only retail investors will remain, leading to smaller flows similar to those seen in February.
BlackRock’s Inflows Show Signs of Slowing Down
BlackRock, which recently announced a new tokenized RWA fund, managed to prevent Thursday’s outflow from reaching three figures like the previous three days. The fund had an inflow of $233.4 million on March 21. Overall, BlackRock received $809 million in inflows for the week. However, the fund experienced slow days on Tuesday and Wednesday when BTC prices dropped. The other seven funds had minimal inflows on March 21, with Invesco Galaxy Bitcoin ETF (BTCO) experiencing a $10 million outflow.
Crypto Market Performance
On March 21, crypto markets saw a 1.5% decline, causing the total market capitalization to fall to $2.63 trillion at the time of writing.
Hot Take: Net Outflows Reflect Investor Profit-Taking
The recent net outflows from Bitcoin ETFs indicate that investors are capitalizing on their profits after the hype surrounding these products in the past two months. Grayscale has been hit particularly hard, experiencing significant outflows throughout the month. However, there are signs that the worst may soon be over as bankruptcies and other factors contributing to the outflows start to subside. BlackRock’s inflows have slowed down but remain relatively steady compared to other funds. Overall, market performance has seen a slight decline. It will be interesting to see how these trends develop in the coming weeks.
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