Bitcoin ETFs See Outflows as GBTC Suffers Largest Daily Outflow
Bitcoin ETFs experienced net negative outflows on Wednesday, suggesting that the hype surrounding these investment vehicles may be waning. The Grayscale Bitcoin Trust (GBTC) saw its largest daily outflow since January 30, with $199.3 million leaving the fund. In contrast, other Bitcoin ETFs had zero flows on the day.
Grayscale Bitcoin ETF Continues to Face Selling Pressure
BlackRock’s fund had $96.5 million in flows, while Fidelity saw $52.5 million. Overall, all ETFs experienced a net outflow of $35 million.
The last time there was a net outflow for Bitcoin ETFs was on January 25, when the market was still in a “sell the news” phase after the ETFs launched. Since then, BTC has surged from around $39,900 to $52,000 due to strong inflows into ETFs.
Grayscale has been facing continuous outflows since converting into an ETF. Many early investors have cashed out due to a previous arbitrage opportunity between the value of GBTC shares and its underlying BTC. With BlackRock’s ETF now available at a lower management fee and higher trading volume, there is little incentive for traders to buy back GBTC.
Sell Pressure Originates from GBTC Holdings Liquidation
In addition to the outflows from GBTC, bankrupt crypto lender Genesis (which shares a parent company with Grayscale) received approval to liquidate over $1.3 billion worth of its GBTC holdings earlier this month. This approval likely contributed to the increase in outflows.
Bitcoin ETFs have attracted $5 billion in net flows since their launch, equivalent to 104,799 BTC.
The European Central Bank recently published a blog post dismissing Bitcoin, despite the approval of ETFs. The bank characterized the asset’s rally following the ETF approvals as a dead cat bounce and stated that Bitcoin is not suitable as a means of payment or investment.
Hot Take: Bitcoin ETFs Face Outflows Amid GBTC Sale Revival
Bitcoin ETFs experienced net negative outflows on Wednesday, suggesting that the hype surrounding these investment vehicles may be waning. The Grayscale Bitcoin Trust (GBTC) saw its largest daily outflow since January 30, with $199.3 million leaving the fund. In contrast, other Bitcoin ETFs had zero flows on the day.
Grayscale has been facing continuous outflows since converting into an ETF. Many early investors have cashed out due to a previous arbitrage opportunity between the value of GBTC shares and its underlying BTC. With BlackRock’s ETF now available at a lower management fee and higher trading volume, there is little incentive for traders to buy back GBTC.
In addition to the outflows from GBTC, bankrupt crypto lender Genesis (which shares a parent company with Grayscale) received approval to liquidate over $1.3 billion worth of its GBTC holdings earlier this month. This approval likely contributed to the increase in outflows.
The European Central Bank recently published a blog post dismissing Bitcoin, despite the approval of ETFs. The bank characterized the asset’s rally following the ETF approvals as a dead cat bounce and stated that Bitcoin is not suitable as a means of payment or investment.
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