Spot Bitcoin ETFs Experience Ongoing Outflows, GBTC Loses $359M
The Grayscale Bitcoin Trust’s (GBTC) exchange-traded fund (ETF) witnessed significant outflows as nearly $359 million exited the fund on March 21. This follows a week of substantial outflows, with the largest single-day outflow of $642 million occurring on March 18. As a result, the total outflows for GBTC this week reached $1.8 billion, marking the fourth consecutive day of net outflows across all 10 Bitcoin ETFs.
Analysts Predict the End of Grayscale Outflows
Experts believe that the trend of outflows from Grayscale’s fund may soon come to an end. Senior Bloomberg ETF analyst Eric Balchunas speculates that the majority of the outflows are a result of bankruptcies in the crypto industry and that the worst may be close to being over. Balchunas suggests that any outflows from prominent industry players like Gemini or Genesis are likely being used to buy Bitcoin, which ultimately supports the market.
“Takeaway: the worst is probably close to being over. Once it is, only retail will be left and flows should look more like the Feb trickle,” Balchunas wrote on X.
As of March 21, Grayscale reported that its Bitcoin Trust held $23.2 billion in assets under management. Since its conversion to an ETF on January 11, GBTC has shed a total of $13.6 billion. Independent researcher ErgoBTC noted that approximately $1.1 billion worth of recent GBTC outflows seem to be associated with bankrupt crypto lender Genesis.
“Resulting activity volumes and timings of funds out of GBTC and into Genesis match pretty well,” Ergo said.
The timing and volume of the outflows align with Genesis’ activity, suggesting a correlation between the two. In February, Genesis received court approval to liquidate $1.3 billion worth of GBTC shares to repay its creditors. Prior to that, bankrupt exchange FTX sold 22 million GBTC shares, valued at nearly $1 billion, completely liquidating its holdings.
Bernstein Raises Bitcoin Price Forecast to $90,000
Despite the recent slide in Bitcoin prices, investment firm Bernstein has raised its year-end forecast for the cryptocurrency. In a research note, Bernstein revised its price target for bitcoin to $90,000, up from the previous projection of $80,000. The firm also expressed optimism about cryptocurrency mining stocks, citing bitcoin’s recent rise to around $74,000 and the positive response to new spot BTC ETFs.
Analysts Gautam Chhugani and Mahika Sapra from Bernstein highlighted several factors contributing to their positive outlook. They mentioned the start of a new Bitcoin bull cycle, strong inflows into ETFs, aggressive expansion of miner capacity, and record-high revenues for miners. These factors make Bitcoin miners an attractive investment option for equity investors seeking exposure to the cryptocurrency market.
Additionally, Bernstein adjusted its forecast for the upcoming halving event in April. They now expect a 7% decrease in the hash rate, representing the computational power required for bitcoin mining. This revision is a more optimistic outlook compared to their previous forecast of a 15% decline as they anticipate fewer shutdowns and consolidation within the industry.
Hot Take: Spot Bitcoin ETFs Continue to Experience Outflows
The Grayscale Bitcoin Trust’s exchange-traded fund (ETF), GBTC, has seen ongoing outflows with nearly $359 million exiting the fund on March 21. This follows a week of substantial outflows, resulting in a total of $1.8 billion leaving GBTC this week alone. However, analysts believe that the worst may be over as the majority of outflows are likely due to bankruptcies in the crypto industry.
Grayscale’s Bitcoin Trust currently holds $23.2 billion in assets under management, but since its conversion to an ETF in January, it has lost a total of $13.6 billion. Additionally, there seems to be a correlation between the outflows from GBTC and activity from bankrupt crypto lender Genesis.
Despite these outflows, investment firm Bernstein has raised its year-end forecast for Bitcoin to $90,000, citing several factors contributing to their positive outlook. These factors include the start of a new Bitcoin bull cycle, strong inflows into ETFs, aggressive expansion of miner capacity, and record-high revenues for miners.
Overall, while spot Bitcoin ETFs continue to experience outflows, there is optimism that the trend may soon come to an end and that Bitcoin prices will surge towards the end of the year.
Sources:
– Farside Investors
– Eric Balchunas on Twitter
– Cryptonews
– Investor.com
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