Bitcoin ETF: GBTC Outflows At Monthly Low, BTC Relief Rally Ahead?
Highlights
- Grayscale GBTC outflows dropped by 60% on Thursday.
- BlackRock's IBIT is gearing up to takeover GBTC in total AUM.
- GBTC outflows can slow after reduced fee and drop in the selling by Gemini.
After last week’s heavy outflows, the spot Bitcoin ETFs have once again witnessed net inflows throughout this week so far. On Thursday, March 28, all nine spot Bitcoin ETFs recorded a combined inflow of $178 million, however, one important development was a strong reduction in GBTC outflows. On Thursday, the Grayscale Bitcoin ETF GBTC recorded $105 million worth of outflows, a drop of 60% from its previous day.
GBTC Records Lowest Outflows for March
Throughout the month of March, there have been massive outflows from the Grayscale Bitcoin ETF GBTC. On Thursday, GBTC witnessed its lowest outflow ever since March 12.
🚨 $GBTC outflows of $105 million on 3/28 pic.twitter.com/jZZMYDZTvY
— HODL15Capital 🇺🇸 (@HODL15Capital) March 28, 2024
As per data from Farside Investors, more than $14.6 billion worth of Bitcoins have moved off GBTC ever since the Bitcoin ETF launch. GBTC has lost more than 50% of its Bitcoin holdings since the beginning of the year and currently stands at $340,000.
One of the major reasons behind these high GBTC outflows is the very high management fee that the fund charges. This has led to funds moving out of GBTC and going into other Bitcoin ETFs like BlackRock and Fidelity which have relatively very low management fees. BlackRock’s IBIT Bitcoin ETF has seen a staggering $13.8 billion in inflows and is set to overtake GBTC in total AUM.
Will the Grayscale Bitcoin ETF Outflows Slow Down Anytime Soon?
Amid the heavy outflows, Grayscale has taken cognizance of the matter regarding its high management fees of 1.5% and decided to reduce it very soon. Last week, Grayscale CEO Michael stated that the GBTC fees will reduce over time. However, he didn’t mention exactly by what magnitude it would reduce.
On the other hand, some top Bloomberg analysts also said that the massive outflows from GBTC have been due to heavy liquidations by bankrupt players like Gemini looking to repay its creditors. Thus, this sell-side pressure on GBTC is likely to subside over a period of time.
However, with big players like BlackRock and Fidelity already in the market, Grayscale is certainly going to have a tough time to compete with.
Thus, if GBTC outflows drop and inflows continue at the same pace, it can lead to a supply shock in the market thereby driving the Bitcoin price to rally even further.
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