Grayscale’s Bitcoin Trust exchange-traded fund (ETF) experienced its first day of net positive inflows on May 3, with $63 million in inflows. This comes after approximately $17.5 billion in outflows since the launch of 11 spot Bitcoin ETFs. In addition to Grayscale, Franklin Templeton’s Bitcoin ETF saw record high inflows of $60.9 million, while Fidelity’s Wise Origin Bitcoin Fund led in inflows with $102.6 million. The Bitwise Bitcoin Fund and Invesco Galaxy Bitcoin ETF also saw significant inflows, sparking speculation in the crypto community about the potential impact on Bitcoin’s price. Pseudonymous crypto investor DivXman suggested that decreased sell pressure and increased demand could result from ETFs collectively buying more BTC than miners can create.
Speculation about the implications of these inflows for Bitcoin’s price was prevalent among the crypto community, with some predicting a new all-time high for Bitcoin. Crypto trader Jelle cited the significant inflows into Grayscale’s ETF as a bullish indicator pointing towards this possibility. The positive inflows into Grayscale’s Bitcoin Trust seemed to have an immediate effect on Bitcoin’s price, with a 4.91% surge to reach $62,840 at the time of publication. This response to both outflows and inflows emphasized the market’s sensitivity to these factors and suggested a potential bullish trend for Bitcoin in the near future.
Several factors have contributed to Grayscale’s previous outflows since the launch of the spot Bitcoin ETFs. One significant reason is the comparatively high fees of GBTC, currently standing at 1.5%, while other ETFs offer fees below 1%. Additionally, the selling off of large amounts of GBTC shares by bankrupt crypto firms FTX and Genesis to repay creditors has been another key driver of outflows. Genesis liquidated approximately 36 million GBTC shares for $2.1 billion to acquire 32,041 Bitcoin on April 6, further contributing to Grayscale’s outflows. Market observers have been speculating about when the “Bitcoin bleed” in GBTC might come to an end, with some analysts believing the outflows could be nearing their conclusion.
Despite some analysts predicting the end of Grayscale’s outflows in late January and February, the bleeding continued due to factors such as Genesis liquidating GBTC shares. ETF analyst Eric Balchunas from Bloomberg previously suggested that the outflows would likely stop once GBTC experienced a 25% reduction in outstanding shares. A poll indicated that most respondents expected the end of the bleed to occur in the range of 35-50%. The news of positive inflows into Grayscale’s Bitcoin Trust and other Bitcoin ETFs has sparked optimism among investors and traders, leading to speculations about the potential impact on Bitcoin’s price and the possibility of a new all-time high. The future trajectory of Bitcoin’s price remains uncertain, with market dynamics and various factors contributing to the ongoing fluctuations in the cryptocurrency market.
