Bitcoin Spot ETFs Experience Massive Outflows
Spot Bitcoin ETFs have seen a significant net outflow of $159 million, marking the largest single-day total net outflow since their launch.
The Grayscale ETF (GBTC) has experienced the most substantial net outflows, with $429 million leaving the fund in just one day.
However, all other ETFs, excluding Grayscale, have experienced net inflows of $270 million.
Notably, there has been a decline in the outflow of funds from Grayscale Bitcoin Trust (GBTC) for two consecutive days, representing the lowest outflow since the introduction of Bitcoin spot ETFs in the United States.
Bloomberg analyst Eric Balchunas noted that while GBTC outflows are showing a downward trend, liquidations remain substantial.
On January 23rd, GBTC saw an outflow of $515 million, followed by $640 million on the 22nd.
In total, over nine trading days, the Bitcoin Trust lost 106,092 BTC, equivalent to approximately $4.4 billion in value.
Lower-Fee Bitcoin Spot ETFs Expected to Attract More Inflows
Aurelie Barthere, Principal Research Analyst at Nansen, predicts that lower-fee ETFs will attract more inflows in the short term.
JPMorgan analysts also believe that the success of these newly created ETFs will depend on fees and liquidity.
Given the high fees associated with GBTC, they expect significant outflows from this Bitcoin trust.
Speculative investors who purchased discounted GBTC shares are likely to contribute to further GBTC liquidation.
The analysts anticipate approximately $3 billion exiting GBTC and flowing into the newly launched ETFs.
If GBTC fails to reduce its fees to the level set by issuers like BlackRock, analysts predict even larger outflows of $5-$10 billion.
Hot Take: Bitcoin Spot ETFs Experience Outflows, but Hope Lies in Lower Fees
Bitcoin spot ETFs have witnessed the highest single-day outflows since their launch, with Grayscale ETF (GBTC) leading the way. However, there is hope for the market as lower-fee ETFs are expected to attract more inflows. The decline in GBTC outflows indicates a possible trend shift, but significant liquidations still persist. JPMorgan analysts emphasize that the success of these newly created ETFs will depend on fees and liquidity. With GBTC’s high fees and speculative investors looking to liquidate, there could be billions of dollars flowing into the new ETFs. The competition among Bitcoin spot ETF providers will be shaped by factors such as reputation, size, existing footprint, and management fees. Overall, while outflows continue for now, lower fees could be the key to success in this market.
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