Saturday Newsletter

Explore the latest trends, gain valuable insights, and stay informed in the dynamic cryptocurrency ecosystem.

04 May 2024

Grayscale Investments’ Grayscale Bitcoin Trust (GBTC) has marked its first day of net positive inflows, reversing a trend of consistent outflows since the introduction of Bitcoin ETFs in January.

On May 3, GBTC registered $63 million in inflows, a significant turnaround following an approximate $17.5 billion in outflows since the 11 spot Bitcoin ETFs debuted on January 11, according to preliminary data from Farside.

Other Bitcoin funds also saw noteworthy activity, including Franklin Templeton’s Bitcoin ETF (EZBC) with its highest inflow of $60.9 million, and Fidelity’s Wise Origin Bitcoin Fund (FBTC) which led the day with $102.6 million in inflows. Bitwise Bitcoin Fund (BITB) and Invesco Galaxy Bitcoin ETF (BTCO) also saw inflows of $33.5 million and $33.2 million, respectively.

The shift in inflows has sparked speculation about its impact on Bitcoin’s price. Crypto investor DivXman noted that GBTC was a major source of sell pressure for spot Bitcoin ETFs, but the trend might be changing. He explained that a decline in sell pressure and increased demand from ETFs buying more BTC could positively influence Bitcoin’s market.

Crypto traders predict that Bitcoin may reach a new all-time high soon. The sentiment was echoed by crypto trader Jelle, who suggested that Grayscale’s inflows could lead to a significant uptick in Bitcoin’s price. Jordan Lindsey also pointed out Bitcoin’s positive response to the shift in outflows and inflows.

Bitcoin’s price rose by 4.91% in the past 24 hours, reaching $62,840 at the time of publication, according to CoinMarketCap data.

Various factors have contributed to Grayscale’s ongoing outflows since the launch of the 11 spot Bitcoin ETFs. GBTC’s high fees, set at 1.5%, compared to the lower fees of other ETFs below 1%, have been a notable drawback. Franklin Templeton’s ETF currently offers the lowest fee at 0.19%. Additionally, the bankruptcies of crypto firms FTX and Genesis have led to the liquidation of large amounts of GBTC shares to repay creditors.

On April 6, Cointelegraph reported that Genesis sold approximately 36 million GBTC shares for $2.1 billion to purchase 32,041 Bitcoin. This shift in inflows marks a notable change in the crypto market, potentially signaling a new chapter for Grayscale’s GBTC and the broader Bitcoin market.