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Grayscale Bitcoin Trust (GBTC) and other Bitcoin (BTC) funds have recorded their largest day of net outflows as the markets continue to slide since launching earlier this month.
According to Bloomberg Intelligence data, spot Bitcoin exchange-traded funds (ETFs) saw a total of $158million in outflows as buying demand appears to be waning.
That said, it’s important to note that there have been over $800m in total inflows, which may confuse some people considering that the price of BTC tumbled drastically over the last week.
Spot BTC ETF launch
Analyst James Seyffart was quick to note that “ETF inflows can coincide with falling bitcoin prices, and vice versa”.
Despite Grayscale bleeding out hundreds of millions worth of outflows a day, the likes of Fidelity Wise Origin Bitcoin Fund (FBTC) and BlackRock’s iShares Bitcoin Trust (IBIT) have been enjoying some solid inflows of capital since the 11 January 2024 launch, but it appears as though appetite is beginning to slow down.
Grayscale has shed over 100,000 BTC in these nine days of trading, representing over four billion in outflows.
Naturally, this put downward pressure on the overall crypto market, but signs such as the slowing in daily GBTC trading volumes could indicate that these bearish conditions, at least for Grayscale, could soon be over.
Market forces
Alongside the fact that FTX reportedly sold almost $1bn in GBTC shares, we also reported earlier this week that Grayscale’s command over the spot BTC ETF market may be coming to a close as traders move their investments into other providers who offer lower fees, or simply are exiting the market.
But other factors at play seem to have a grip over market dynamics and investor confidence, namely the ongoing legal troubles of major industry players such as FTX, Terraform Labs, and Binance.
That said, some analysts remain optimistic and sense that the spot BTC ETF situation is simply a market correction. This is evidenced in the slowing of redemptions from GBTC, as reflected by the decreasing volumes across all providers which hold cumulative 24-hour volumes presently hovering at the $1bn mark.
Seemingly, the downward pressure on ETFs has provided some relief to the price of BTC as it now begins to push back up above the $40,000 price tag. This would suggest that capital gains from these ETFs are beginning to make their way back into the crypto market.
BTC is presently trading at $41,383.75, a week-long high after falling below $39,000 on 23 January.
Data from CryptoQuant would also suggest a bullish trend, with the Bitcoin: Stablecoin Supply Ration (SSR) at a low value of 11.277, suggesting increasing buying pressure for BTC.
