Grayscale’s GBTC Daily Outflow Hits Record Low of $18M as Bitcoin Price Regains $70k

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After over two months of significant Bitcoin outflows, the Grayscale Bitcoin Trust ETF (GBTC) experienced its smallest cash withdrawal on Thursday, with approximately $18 million being taken out based on market data. Since the Securies and Exchange Commission’s approval of spot Bitcoin ETFs in the US earlier this year, a total of around 300,700 Bitcoins, worth roughly $15.96 billion, have been withdrawn from Grayscale’s GBTC.

Yesterday, SoSoValue reports a net inflow of $123 million for Bitcoin spot ETFs.

Starting from Thursday, Grayscale’s GBTC had approximately 312,878 Bitcoins, equivalent to around $21.8 billion. The total number of outstanding shares for Grayscale’s GBTC was 354,890,100, causing the stock to trade near $62.39 as of Wednesday.

The Grayscale’s GBTC is currently facing significant competition from other Bitcoin spot ETFs, most notably the iShares Bitcoin Trust (NASDAQ: IBIT), which is supported by BlackRock Inc (NYSE: BLK). Notably, IBIT and Fidelity Wise Origin Bitcoin Fund (BATS: FBTC) collectively hold approximately 411,797 Bitcoins with no net outflows recorded to date. In simpler terms, the GBTC is being challenged by these two ETFs, which are popular choices backed by reputable firms and have not experienced any significant Bitcoin withdrawals.

Bitcoin ETF Flow – 10 April 2024
GBTC Outflow $18m
— BitMEX Research (@BitMEXResearch) April 10, 2024

Grayscale’s Plan to Negate Cash Outflows

Grayscale and their team are making efforts to stop more bleeding as institutional investors increasingly adopt Bitcoin and digital assets. Previously reported by Coinspeaker, Grayscale is trying to get the SEC’s approval for its Grayscale Bitcoin Mini Trust, which comes with a lower management fee from Grayscale.

An additional factor driving some investors away from the GBTC is the high sponsor fee of around 1.5%, which is much higher than the typical fee of approximately 0.25% for other Bitcoin spot ETFs. As a result, many have been shifting their investments to these lower-cost alternatives. Crypto firms in bankruptcy have also contributed to GBTC’s liquidation.

In the meantime, Michael Sonnenshein, Grayscale’s CEO, anticipates a noticeable decrease in GBTC’s outflows of cash in the short term as the overall outflow finds balance.

Sonnenshein expressed his belief that the fund has begun to stabilize, with most of the expected outflows – such as bankruptcy selling and investor switch trades – having already occurred. As markets develop further, he expects GBTC’s fees to decrease over time.

Gradually, Sonnenshein is optimistic that Grayscale will draw in more investors towards its Bitcoin spot ETF offerings and other similar products.

Impact on BTC Price Action

In recent weeks, Bitcoin’s price has made several attempts to climb above the $74,000 mark without success. Over the past seven days, however, it has managed to gain approximately 7.7 percent, pushing its value up to around $70,894 during early trading in London on Thursday.

$BTC Bullish Pennant formation on the Daily timeframe Chart is still in play..!!
A Successful Breakout could Send Bitcoin to a New all-time High. (85k) 📈#Crypto #Bitcoin #BTC
— Captain Faibik (@CryptoFaibik) April 11, 2024

Based on the Bitcoin price assessment given by well-known cryptocurrency expert Captain Faibik, there are indications that the BTC value could surge past $85,000 against the US dollar due to a bullish pattern in the form of a daily pennant chart formation.

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2024-04-11 12:06