Grayscale Bitcoin Trust Sees Inflows After US ETFs Approval
The Grayscale Bitcoin Trust, the world’s largest cryptocurrency investment vehicle, has seen a significant increase in investor funds for the first time since the approval of US spot Bitcoin exchange-traded funds (ETFs) in January.
Grayscale Bitcoin Trust Receives Inflows
Bloomberg data shows that on May 3, Grayscale’s Bitcoin Trust received approximately $63 million in net inflows, marking a turnaround after experiencing net outflows totaling around $17.4 billion since its conversion.
- Outflows connected to bankruptcies
- Previous outflows linked to bankruptcies in the crypto industry
- Defunct companies withdrew funds from the trust to repay creditors
- Competition from BlackRock
- BlackRock’s iShares Bitcoin Trust (IBIT) manages $16.91 billion
Grayscale’s Response to Competition
In response to increasing competition, Grayscale announced plans in March to seek approval from the Securities and Exchange Commission (SEC) to create a new, lower-fee Bitcoin Mini Trust by spinning off a portion of its assets.
- Introduction of Bitcoin Mini Trust
- Grayscale to split assets and create a new lower-fee Bitcoin Mini Trust
- Fees for the Mini Trust yet to be determined
Hong Kong Market Grows Amid High Demand
ETF expert Eric Balchunas at Bloomberg commented on the positive net flows in the Bitcoin ETF market, noting resilient investor sentiment despite earlier outflows. Hong Kong has also seen progress in its ETF space, with a new dashboard introduced to support the growing market.
- Eric Balchunas’ Observation
- Over 95% of ETF investors held during a significant downturn
- Positive net flows observed in Bitcoin ETFs market
- Advancements in Hong Kong ETF Market
- Bitcoin and Ethereum ETFs launched in Hong Kong
- New HK ETF Flow dashboard introduced
Cryptocurrency Market Update
Currently, the leading cryptocurrency’s price stands at $63,300 per coin, indicating a 1.4% decrease in value over the past 24 hours. The dip followed an unsuccessful attempt to maintain a position above the $65,000 mark during early trading hours on Monday.
Featured image from Shutterstock, chart from TradingView.com
Hot Take: Grayscale Bitcoin Trust Gains Momentum
Grayscale Bitcoin Trust has rebounded with significant inflows after the approval of US spot Bitcoin exchange-traded funds. This marks a positive turn for the trust, which faced previous outflows linked to industry bankruptcies. Competition from BlackRock’s iShares Bitcoin Trust adds to the trust’s challenges, prompting Grayscale’s strategic response through the introduction of a new, lower-fee Bitcoin Mini Trust.
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