Grayscale’s Bitcoin Trust ETF, after experiencing continuous outflows, saw a day of net positive inflows on May 3, with $63 million flowing in. This positive momentum came after approximately $17.5 billion in outflows since the launch of 11 spot Bitcoin ETFs on January 11. Additionally, Franklin Templeton’s Bitcoin ETF and Fidelity’s Wise Origin Bitcoin Fund also witnessed significant inflows on the same day, signaling a potential shift in dynamics within the crypto market. Speculation within the crypto community suggests that these inflows could lead to decreased sell pressure and increased demand, potentially impacting Bitcoin’s price.
Pseudonymous crypto investor DivXman noted that Grayscale’s Bitcoin Trust had been a primary source of sell pressure across all spot Bitcoin ETFs and 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. Echoing this sentiment, other traders predicted that Bitcoin’s new all-time high could be on the horizon, citing the significant inflows into Grayscale’s ETF as a bullish indicator. As a response to the news, Bitcoin’s price surged by 4.91% over the past 24 hours to reach $62,840 at the time of publication.
Various 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 of outflows. Market observers have been speculating about when the “Bitcoin bleed” in GBTC might come to an end, with discussions around the implications of various market factors.
On April 6, Genesis liquidated approximately 36 million GBTC shares for $2.1 billion to acquire 32,041 Bitcoin. 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 Genesis to liquidate approximately $1.3 billion worth of GBTC shares as part of efforts to reimburse investors, prolonging the outflows. 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 indicated that most respondents expected the outflows to end in the range of 35-50%, highlighting the uncertainty surrounding the situation.
Overall, the recent influx of inflows into Grayscale’s Bitcoin Trust ETF, alongside other significant funds in the market, signals a potential shift in dynamics within the crypto market. Speculation regarding decreased sell pressure, increased demand, and potential impacts on Bitcoin’s price are at the forefront of discussions within the community. With various factors contributing to previous outflows from Grayscale’s ETF, market observers continue to monitor the situation closely, awaiting further developments and potential indicators for the future direction of the market.
