Bitcoin Spot ETF Jitters Subside: Grayscale Outflows Drop To New Lows
Outflows from Grayscales Bitcoin Trust (GBTC) seem to be slowing down, as shown by the trading activity of Bitcoin ETFs. This comes as investor anxiety over Grayscales Spot ETF seems to finally be subsiding, with the entire ETF cohort continuing to attract huge trading volumes and rapid growth in assets under management. As a result, the GBTC saw daily outflows drop steadily over the course of the week to just $44.2 million on Friday, the lowest since spot Bitcoin ETFs went live.
Outflows Drop As Grayscales BTC ETF Stabilizes
After several weeks of elevated outflows totaling over $7.44 billion, investors pulled just $436.2 million of Grayscales Bitcoin Trust last week. Notably, the lowest daily outflow of $44.2 million came on the last day of the week.
Grayscales GBTC is undoubtedly the biggest Bitcoin ETF among its cohort. This is because GBTC was launched in 2013 as a Bitcoin trust available only in OTC markets., allowing it to grow over the years as it was the only go-to for investors looking to dive into the crypto industry.
However, after a lengthy regulatory procedure, the SEC finally approved GBTCs conversion into a Spot Bitcoin ETF. Consequently, Grayscales new Bitcoin ETF went live on January 11, along with nine other recently approved ETFs.
GBTC held around $27 billion worth of BTC assets when it first began trading as an exchange-traded fund (ETF). Surprisingly, Grayscales conversion into an ETF came along with a vast amount of withdrawals from investors, and by the end of January, GBTC had witnessed $5.55 billion worth of withdrawals.
Many analysts have attributed Grayscales high management fees (1.5%) to the outflows. During this period, other Bitcoin ETFs continued to attract new money. BlackRocks iShares Bitcoin Trust (IBIT) now has over $6.64 billion worth of BTC in its ETF, followed by the Fidelity Wise Origin Bitcoin Fund (FBTC) with $4.73 billion.
Whats Next For Grayscales Bitcoin ETF?
While last weeks outflow data is an encouraging sign for Grayscale and the wider ETF market, outflows could continue in the coming weeks. Bankrupt crypto lending firm Genesis recently received court approval to sell its $1.3 billion worth of GBTC in order to repay its creditors.
The prospect of a liquidation of such gravity has propelled concerns amongst investors of the potential downward implications on the price of BTC. However, many others remain optimistic. According to a report by crypto exchange Coinbase, full liquidation would have a neutral impact on the market as the majority of funds are expected to remain in the crypto ecosystem.
At the time of writing, Bitcoin was trading at $51,300, while Grayscales GBTC now had $22.7 billion worth of assets under management.
Read more: https://www.newsbtc.com/news/bitcoin/bitcoin-spot-etf-grayscale-outflows/
Text source: NewsBTC
