Grayscale’s GBTC Bitcoin ETF Records Inflows For The First Time in 78 Days

After a prolonged period of continuous outflows, Grayscale’s Bitcoin Trust exchange-traded fund (ETF) recorded its first day of net positive inflows.According to preliminary data from Farside, on May 3, Grayscale’s Bitcoin Trust (GBTC) witnessed $63 million in net inflows. The positive momentum comes after an approximate $17.5 billion in outflows since the launch of 11 spot Bitcoin ETFs on January 11.

Franklin Templeton’s Bitcoin ETF Sees Inflows 

Among the other funds making headlines, Franklin Templeton’s Bitcoin ETF saw its inflows reach a record high of $60.9 million. Meanwhile, Fidelity’s Wise Origin Bitcoin Fund led the day’s inflows with an impressive $102.6 million, followed closely by the Bitwise Bitcoin Fund with $33.5 million and the Invesco Galaxy Bitcoin ETF with $33.2 million.The crypto community has been buzzing with speculation regarding how this turn of events might influence the price of Bitcoin. Pseudonymous crypto investor DivXman noted that GBTC had been a primary source of sell pressure across all spot Bitcoin ETFs but hinted at a possible shift in dynamics. He suggested that decreased sell pressure and increased demand might result from ETFs collectively buying more BTC than miners can create.

GBTC inflows of $63M. What does this mean?

The Grayscale Bitcoin Trust $GBTC was the primary source of sell pressure across all spot #Bitcoin ETFs since they went live in January 2024.$GBTC leading outflows throughout the year was due to several factors, the most apparent… pic.twitter.com/A0qDzGbuNh

— DivXMaN (@crypto_div) May 3, 2024

Echoing this sentiment, crypto trader Jelle predicted to his followers that Bitcoin’s new all-time high could be on the horizon, citing the significant inflows into Grayscale’s ETF as a bullish indicator.

Reacting to the news, crypto trader Jordan Lindsey emphasized the impact on Bitcoin’s price, indicating that it was evidently responding to both outflows and inflows. 

Indeed, Bitcoin’s price surged by 4.91% over the past 24 hours to reach $62,840 at the time of publication, according to CoinMarketCap data.

What Led to Grayscale’s Outflows

Several factors have contributed to Grayscale’s previous outflows since the launch of the 11 spot Bitcoin ETFs. One prominent reason is GBTC’s comparatively high fees, standing at 1.5%, while other ETFs boast fees below 1%. Currently, Franklin Templeton offers the lowest fee at 0.19%. Additionally, the selling off of large amounts of GBTC shares by bankrupt crypto firms FTX and Genesis in an effort to repay creditors has been another key driver.On April 6, Genesis liquidated approximately 36 million GBTC shares for $2.1 billion to acquire 32,041 Bitcoin.Market observers have been speculating about when the “Bitcoin bleed” in GBTC might come to an end.While GBTC outflows slowed down in late January and February, some analysts believed they could be nearing their conclusion. However, in mid-February, bankruptcy courts permitted crypto lender Genesis to liquidate approximately $1.3 billion worth of GBTC shares as part of efforts to reimburse investors.ETF analyst Eric Balchunas from Bloomberg previously suggested that the outflows would likely stop once GBTC experienced a 25% reduction in outstanding shares. However, a poll on X indicated that most respondents expected the bleed to end in the range of 35-50%.

GBTC has bled 13% of its shares outstanding. How high do you think that number get before the mass exodus stops?

— Eric Balchunas (@EricBalchunas) January 23, 2024