A recent report from SoSoValue shows significant movements in the Bitcoin exchange-traded funds (ETFs) market, mainly focusing on the outflows observed in Grayscale’s Bitcoin Trust (GBTC) and the broader net outflow of $58.03 million from Bitcoin spot ETFs.
The data highlights the dominance of outflows, with GBTC alone experiencing a net outflow of $79.38 million, contributing to its historical net outflow of $16.46 billion.
In contrast, the BlackRock ETF IBIT saw a net inflow of approximately $25.78 million.
GBTC Sees a total of $16.46B in Outflows
Despite GBTC seeing over $16.46 billion in outflows, analysts suggest a potential shift in dynamics, especially considering Bitcoin’s volatility. With April 20 looming as a significant date to monitor, there will be a significant shift for ETFs.
Addressing concerns surrounding low inflows into US spot Bitcoin ETFs, Bloomberg ETF analyst James Seyffart reassured investors, emphasizing that such fluctuations are part of normal market behavior. Seyffart noted that significant inflows or outflows occur sporadically, usually due to demand-supply imbalances, rather than indicating fundamental flaws in the product.
On March 26, analysts speculated about the potential end of outflows from Grayscale’s fund. Senior Bloomberg ETF analyst Eric Balchunas suggested that most outflows might be linked to bankruptcies in the crypto industry, hinting at a possible stabilization shortly.
The market turbulence coincides with Bitcoin’s price volatility, compounded by geopolitical events such as Iran’s retaliatory actions against Israel and anticipation surrounding Bitcoin’s halving event on April 20.
🚨 GBTC Sees $643M Outflow in a Day as Bitcoin Price Drops Below $65K@Grayscale’s spot Bitcoin ETF, GBTC, has seen the biggest outflow as Bitcoin price continues to drop.#CryptoNews #BTChttps://t.co/FzRvmasSNV
— Cryptonews.com (@cryptonews) March 19, 2024
Further insights shed light on the magnitude of outflows from GBTC, reaching as high as $643 million, while other ETF products saw modest inflows. Grayscale plans to gradually reduce fees on its flagship product to combat this outflow. CEO Michael Sonnenshein anticipates fee reductions as the market matures, acknowledging the expected outflows as investors take advantage of profit-taking opportunities and unwind positions tied to bankruptcies.
Bitcoin Price Continues to Decline Amidst Outflows and Speculations
While Bitcoin has shown resilience by trading slightly below $64,000, it starkly contrasts the recent boom fueled by the approval of Hong Kong Spot ETFs. However, the cryptocurrency faces downward pressure primarily due to significant outflows and lingering uncertainty in the market.
Adding to the downward pressure on Bitcoin is the liquidation by Bitcoin miners in the days preceding and following the halving event. This continuous selling exerts pressure on the cryptocurrency market, influencing price movements and the overall decline.
Analysts anticipate this selling pressure to persist for weeks and months, potentially leading to a sideways movement in Bitcoin’s price during this period. They claim this is a historical pattern observed during previous halving cycles, and a bullish trend is expected after that.
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