Grayscale Bitcoin Trust Records Inflows After Extensive Sequence of Outflows

After a series of massive outflows totaling $17.5 billion, the Grayscale Bitcoin Trust (GBTC) surprised the market by recording significant inflows for the first time since its launch on January 11, 2024. On May 3, 2024, the Grayscale’s Spot Bitcoin ETF marked the end of 82 consecutive days of pullbacks, with approximately $63 million flowing into the fund.

This move coincides with a notable day for the Bitcoin ETF market, which saw an overall inflow of $378.3 million into various funds. Highlights include BlackRock’s iShares Bitcoin Trust, which added US$12.7 million, and Franklin Templeton’s EZBC, which led with an inflow of US$102.6 million.

This reversal in flows was so surprising that it prompted Eric Balchunas, senior ETF analyst at Bloomberg, to recheck his analysis to confirm the accuracy of the data.

Previously, GBTC faced significant challenges due to its high management fees, at 1.5%, well above the US market average. For example, BlackRock charges just 0.25% for its Bitcoin ETF. Connections to failed cryptocurrency companies also contributed to the exodus of investors, exemplified by massive sales by FTX, which offloaded around $1 billion worth of GBTC.

Wow. Grayscale. pic.twitter.com/DRoZ4sGZVU

— Alex Krüger (@krugermacro) May 4, 2024

Another negative impact came from Genesis, a cryptocurrency exchange, which liquidated nearly 36 million shares of GBTC to acquire 32,041 BTC, which at the time was worth more than $2.1 billion.

This recent entry movement into the Grayscale Bitcoin Trust could indicate a potential turning point in investor confidence towards the cryptocurrency ETF market, pointing to a possible stabilization after a period of high volatility.

At the time of publication, the price of BTC was quoted at US$64,232.42, up 1% in the last 24 hours.

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