Global Crypto Funds Experience Significant Outflows
Last week, global crypto funds witnessed outflows of around $500 million, the highest since spot Bitcoin ETFs were approved by the US Securities and Exchange Commission (SEC) on January 10, according to a report from CoinShares. Grayscale Investments’ spot Bitcoin exchange-traded fund (GBTC), which converted from a trust after the SEC’s decision, led the outflows with $2.2 billion. Since its conversion, GBTC has experienced total outflows of over $5 billion as of January 26.
Reasons Behind the Outflows
The high management fee of 1.5% for GBTC, the highest among all spot Bitcoin ETFs in the market, is partly responsible for the recent outflows. Other short-term factors include FTX’s sale of at least $600 million in GBTC shares and profit-taking by investors who capitalized on the fund’s discount in recent years, as noted by Kaiko Research.
Positive Day for US-Based Bitcoin ETFs
On Friday, GBTC saw outflows of $255 million, marking the first net-positive day of flows for US-based Bitcoin ETFs, including GBTC, in a week. According to JPMorgan Chase & Co., a total of $15 million flowed into the 10 funds.
Hype Around ETFs May Be Diminishing
JPMorgan analysts suggest that the slowing transaction volumes indicate a potential decrease in hype surrounding these ETFs and a shift towards a more normalized flow environment.
Hot Take: Crypto Funds Experience Highest Outflows Since Spot Bitcoin ETF Approval
Last week saw significant outflows amounting to approximately $500 million from global crypto funds, which is the largest since the approval of spot Bitcoin ETFs by the SEC in January. Grayscale Investments’ GBTC led the outflows with $2.2 billion, bringing its total outflow to over $5 billion since its conversion. The high management fee, FTX’s sale of GBTC shares, and profit-taking by investors contributed to these outflows. However, there was a positive day for US-based Bitcoin ETFs on Friday, with $15 million flowing into the 10 funds. This may indicate a diminishing hype around ETFs and a return to a more normalized flow environment.
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