Grayscale Bitcoin ETF Sees Drastic 60% Drop In Outflows, Why This Is Important

Last week, the Grayscale Bitcoin ETF saw significant withdrawals that caused a major drop in Bitcoin‘s price. But as we entered a new week, investor sentiment towards Bitcoin shifted, and the outflows from the ETF have noticeably decreased, reaching one of its smallest amounts for the month.

Grayscale Bitcoin ETF Outflows Drop 60%

Last week saw a significant increase in withdrawals from Grayscale’s Bitcoin trusts, marking the first full week of outflows from Spot Bitcoin ETFs in history. The pace of these withdrawals picked up steadily throughout the week and continued into the new one. Meanwhile, investments into Spot Bitcoin ETFs have been growing, offsetting the impact of the outflows from Grayscale Bitcoin Trust (GBTC).

Although the GBTC has seen consistent outflows, the situation is starting to look more optimistic as the amount of Bitcoin leaving the fund has significantly decreased. For instance, on March 27, there were 299.8 BTC taken out of the fund, but by March 24, this number had dropped to only 104.9 BTC – a reduction of approximately 65%.

The Grayscale Bitcoin ETF experienced its second day with among the smallest outflows, following closely behind the significant outflow of 79 Bitcoins on March 12. This indicates a decreasing trend in outflows as investors adjust and seek opportunities outside the ETF.

Despite winning the race to become the first Bitcoin ETF, the GBTC has continued to experience significant outflows, with over $14.6 billion withdrawn since its approval in January. This represents approximately half of the fund’s total assets. It is likely that these Bitcoins have been transferred to other Spot Bitcoin ETFs, which have been attracting large inflows instead.

This week, there have been more investments flowing into Spot Bitcoin ETFs than outflows, contrasting last week’s trend. The accumulated inflows exceeded $800 million, resulting in approximately $57 billion in total assets under management (AuM) within the first two and a half months.

Why This Could Trigger A BTC Price Rally

When GBTC outflows decreased after increasing for nearly a week prior, it led to an uptick in Bitcoin’s price, which was marked by a rally. Following this, inflows remained the norm for several weeks, during which Bitcoin’s value significantly increased from around $40,000 to over $70,000 within two months.

If the current trend continues, we might be in for another significant Bitcoin price surge, potentially pushing it past $100,000 within the upcoming months. This upward trend may not have reached its peak yet.

Currently, Bitcoin has yet to surpass $70,000 in value despite a minor 1% decrease in the previous day.

Grayscale Bitcoin ETF Sees Drastic 60% Drop In Outflows, Why This Is Important

Read More

2024-03-29 20:10