Grayscale Spot Bitcoin ETF Turns Positive After $17.5 Billion in Outflows and Sees Inflows for the First Time
After almost three months with negative flows, without generating returns, GBTC finally breaks the bad streak. This event takes place alongside the growth of the entire ETF market, which had recorded 7 continuous days of capital outflows.
On May 3, Grayscale’s Spot Bitcoin EFT ended its 82-day streak of outflows since January 11 this year. Farside, an investment management firm provided data showing that the EFT had accumulated inflows of nearly $63 million, along with other Bitcoin ETFs such as BlackRock’s iShares Bitcoin Trust (IBIT), which had inflows of $12.7 million.
Grayscale Bitcoin ETF Witnesses Over $60 Million in Inflows
On that single day, total inflows reached approximately $378.3 million, with Franklin Templeton’s Spot Bitcoin ETF, EZBC, with the highest inflows of $102.6 million. Eric Balchunas, Bloomberg senior analyst and ETF expert, expressed disbelief at Grayscale’s move, claiming that he had to conduct extensive checks to confirm the unexpected development.
Furthermore, the surprising influx comes after a recent development in which 10 US spot Bitcoin ETFs, including BlackRock’s IBIT, collectively recorded huge outflows worth over $563.7 million in a single day These outflows were possibly triggered by the Federal Reserve’s (FED) decision to keep rates unchanged, resulting in a broader slowdown in the cryptocurrency market.
Grayscale’s Spot Bitcoin EFT was on the verge of losing its place as the top Bitcoin ETF, but now that’s all changing as it made its first day of inflows. The reasons for this change are not entirely clear, although there is speculation that the recent entries could be due to Grayscale having heavily promoted its GBTC.
BTC had also seen significant drops around the same time, although the cryptocurrency is up 6.36% in the last 24 hours, jumping above the $60,000 support levels to trade at $63,175, according to CoinMarketCap.
Factors Behind Massive GBTC Outflows
Grayscale experienced its first recorded inflow after experiencing daily outflows worth hundreds of millions since its inception. The asset management company’s Spot Bitcoin ETF also saw its largest outflow of approximately $589.9 million on February 29.
Several factors have contributed to GBTC’s daily outflows, including its exorbitant 1.5% annual management fee. Compared to the 12 Bitcoin Spot ETFs in the United States (US), Grayscale has the most expensive Bitcoin Spot ETF fee, surpassing even BlackRock, the second largest BTC ETF provider, which has an average annual management of 0.25%.
Some of Grayscale’s exits were also the result of a reported selling connection with an insolvent cryptocurrency exchange, FTX and other defunct cryptocurrency companies. FTX had sold GBTC worth around $1 billion, while Genesis, a cryptocurrency brokerage for institutional investors, had sold nearly 36 million GBTC shares to buy 32,041 BTC worth over $2.1 billion.
BTC Forecast
According to CryptoPredictions, Bitcoin started in May 2024 at $135,300 and is predicted to end the month at $64,369,384. During May, the maximum forecasted BTC price is $68,302,039 and the minimum price is $135,300.
The BTC Price is forecast for today (05.05.2024) to be in the $56,609.085 – $83,248.655 price range. Bitcoin is predicted to end today at $66,598,924.
By Leonardo Perez