Turning the Tide: Grayscale’s GBTC Sees First Inflow Since Launch

Grayscale Investments celebrated its first day of positive net inflows for the Grayscale Bitcoin Trust (GBTC) after nearly four months of continuous outflows following its transition to a Bitcoin exchange-traded fund (ETF) in January.

On May 3, GBTC recorded $63 million in inflows, marking a significant turnaround from the approximately $17.5 billion in outflows since the launch of the 11 spot Bitcoin ETFs on Jan. 11, according to preliminary data from Farside.

Among other reported funds, Franklin Templeton’s Bitcoin ETF (EZBC) saw its highest-ever inflow at $60.9 million.

Additionally, Fidelity Wise Origin Bitcoin Fund (FBTC) led the day’s inflows with $102.6 million, followed by Bitwise Bitcoin Fund (BITB) with $33.5 million and Invesco Galaxy Bitcoin ETF (BTCO) with $33.2 million.

Grayscale’s GBTC recorded its first day of inflows on May 3. Source: Farside 

The crypto community has discussed how recent developments might affect Bitcoin’s price.

A pseudonymous crypto investor, DivXman, informed his followers that the GBTC was the main source of selling pressure across all spot Bitcoin ETFs. However, he hinted that the situation might change soon.

In a May 3 post, he explained to his 20,800 followers that “that means a significant decrease in selling pressure and a potential increase in demand as ETFs collectively buy more BTC than miners can produce.”

On the same day, crypto trader Jelle predicted to his 80,300 followers that Bitcoin’s new all-time high is imminent.

“$60 million worth of inflows for Grayscale’s ETF. The halving effects will subside, and six-figure Bitcoin will follow shortly after.”

GBTC Outflows Impact Bitcoin Prices

Meanwhile, crypto trader Jordan Lindsey commented on the news, noting that outflows and inflows influence Bitcoin’s price.

According to data, Bitcoin’s price has risen by 4.91% in the past 24 hours, reaching $62,840 at publication.

Bitcoin has recovered after trading below a key support level at $58,926. Source: CoinMarketCap

Several factors have contributed to Grayscale’s ongoing outflows since its 11-spot Bitcoin ETFs launched. One reason is GBTC’s high fees compared to other available ETFs. GBTC’s fee is 1.5%, whereas other ETF fees are below 1%.

The cheapest option is Franklin Templeton, with a fee of 0.19%. Another significant factor is the selling off of large amounts of GBTC shares by bankrupt crypto firms FTX and Genesis to repay creditors.

On April 6, Cointelegraph reported that Genesis liquidated approximately 36 million GBTC shares for $2.1 billion to purchase 32,041 Bitcoin.

Related Reading | Cardano Founder Reacted To Michael Saylor’s ADA, XRP, ETH Criticism

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

Comments (No)

Leave a Reply