Grayscale’s Bitcoin Trust (GBTC), the world’s largest spot Bitcoin ETF, appears to be witnessing a turnaround after facing significant outflows since the introduction of spot Bitcoin (BTC) ETFs in January. According to data provided by Farside Investors, GBTC saw $3.9 million in net inflows on May 6, marking its second consecutive day of inflows.
While the $3.9 million figure may seem modest compared to the capital influx experienced by other ETFs like the Fidelity Wise Origin Bitcoin Fund (FBTC), it is a notable development for GBTC, which had been grappling with substantial outflows since its conversion into an ETF on January 10.
Prior to this recent shift, GBTC had recorded consecutive outflows that saw it lose a staggering 33% of its Bitcoin holdings. This exodus of capital had a significant impact on the daily performances of the broader spot Bitcoin ETF market. However, on May 3, GBTC recorded its first net inflow in over three months, signaling a potential shift in investor sentiment.
First time ever 1D flows all green, no red for the Bitcoin Bunch. Not going to spike the football like some did during the outflow period but will point out that over 95% of the ETF investors HOLD-ed during what was a pretty nasty and persistent downturn. Will same happen next… pic.twitter.com/3l3uwwmqGy
— Eric Balchunas (@EricBalchunas) May 6, 2024
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The outflows that GBTC endured since January amounted to a colossal $17.5 billion, highlighting the immense pressure the trust had been under. While the recent inflows may appear modest in comparison, they represent a notable turnaround and could indicate a gradual restoration of investor confidence in GBTC.
With Grayscale’s Bitcoin Trust contributing to net inflows, the spot Bitcoin ETF market saw significant capital inflows over the past few days. On May 3, spot Bitcoin ETFs collectively registered over $378.3 million in inflows, followed by a total of $217 million on May 6, with GBTC being among the contributors. Top performers on May 6 included the Fidelity Wise Origin Bitcoin Fund (FBTC) with $99.2 million in inflows, the Ark 21Shares Bitcoin ETF (ARKB) recording $75.6 million, and the BlackRock iShares Bitcoin Trust (IBIT) with $21.5 million in inflows. According to Bloomberg analyst Eric Balchunas, the spot ETF market is expected to experience a mix of inflows and outflows over time, with successful funds generally exhibiting continued growth and a strong, committed investor base.
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The inflows into spot Bitcoin ETFs appear to be reflecting Bitcoin’s (BTC) recent price performance, which has seen some volatility over the past few days. After dropping to a low of around $57,000, BTC bounced back and exceeded $65,000 in market value. However, in the last 24 hours, Bitcoin has dropped 1.59% and is currently trading at around $64,400 at the time of writing. Despite the recent dip, investors seem to be taking advantage of the price fluctuations to accumulate Bitcoin through spot ETF products like GBTC, FBTC, ARKB, and IBIT, contributing to the strong inflows observed over the past couple of days.
Raksha, a seasoned journalist, specializes in crafting insightful narratives on blockchain and AI developments. With a keen eye for innovation, she distills complex topics into accessible stories, providing readers with a clear understanding of the dynamic intersection between these transformative technologies.
