Grayscale Bears Resurfaces as GBTC Suffers Unusual Outflow

A look at the data provided by Bloomberg Intelligence shows that the spot Bitcoin ETF product from investment asset management firm Grayscale Investments is seeing a return in its bear sentiment. 

Grayscale Outflows Tops $101M

Based on the data, Grayscale’s GBTC outflows are back and this time, it touched $101.6 million. This comes after the spot Bitcoin ETF registered two days of outflows under $100 million, crossing the threshold. 

This was not expected as it had been reported a few days earlier that the GBTC outflow dropped to a record low. On February 7, BitMEX Research revealed that total inflows for 10 Bitcoin ETFs dropped to just $33.7 million. In terms of net outflows Grayscale’s GBTC slowed to a record low of $72.7 million.

Compared to February 5 when the spot Bitcoin ETF registered net outflows of $107.9 million, the figure from February 7 confirmed that the outflows were gradually reducing.

Market observers expected that this was the beginning of the end to the mass exodus on the Bitcoin ETF. Moreso, they predicted that the move will impact positively on the price of Bitcoin and the outlook of the broader crypto market. 

Bitcoin Price Retests $47,000

The current market data confirms that GBTC is not moving as predicted rather it is succumbing to the bears. 

Also, Bitcoin price is now changing hands for $47,022.01, with a 4.24% increase in the last 24 hours. This is the most ambitious price mark for the premier coin since spot Bitcoin ETFs were greenlighted by the SEC. The positive price movement could have been driven by a number of factors including the upcoming halving event scheduled for April. 

Notably, most of the money lost from GBTC has been discovered to be moving between BlackRock’s IBIT and Fidelity FBTC. Even with this, some analysts believe that GBTC still has an overall optimistic outlook.

Compared to the other spot Bitcoin ETF issuers, Grayscale happens to be the liquidity leader in the category. It still charges 1.5% management fees for its spot Bitcoin ETF, the highest amongst all eleven Bitcoin ETFs. 

To remain a leader and continue to charge this high management fee, Grayscale may have to adopt a robust derivatives ecosystem developed around the underlying ETF.