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The decline in Bitcoin ETF inflows and the record outflow from GBTC suggest a reevaluation of Bitcoin investment strategies among institutional and retail investors.
Bitcoin Exchange-Traded Fund (ETF) inflows are showing signs of decline, while the Grayscale Bitcoin Trust (GBTC) has witnessed its largest daily outflow to date, indicating shifting investor sentiment and market dynamics.
This development comes amidst a backdrop of increased competition and evolving preferences within the cryptocurrency investment landscape.
In recent days, the total inflows into Bitcoin ETFs have dwindled, with net inflows of $150 million or less, a significant drop compared to previous levels. Notably, major players like Fidelity and others are registering less than $10 million in daily inflows.
Yesterday, the Bitcoin spot ETF experienced its third net outflow since its launch, reaching a new high. According to SoSo Value, and data from Farside Investors showed that the total net outflow of the Bitcoin spot ETF was $154 million, largely influenced by GBTC’s net outflow of $643 million.
This marks the third net outflow since January 25, with previous outflows occurring on February 21 ($35.7 million) and March 1 ($140 million), setting a record for the Bitcoin spot ETF.
This decline suggests a waning interest in Bitcoin ETFs, possibly influenced by market conditions and investor strategies.
GBTC Bitcoin ETF Records Historic Outflow
On March 18, the Grayscale Bitcoin Trust (GBTC) experienced its largest outflow to date, with a total of $643 million exiting the trust. This significant movement suggests a notable shift in GBTC’s holdings, with approximately 10,000 Bitcoin leaving the trust.
This trend aligns with a broader reduction in GBTC’s Bitcoin holdings since its ETF conversion, dropping from 620,000 BTC to 368,000 BTC, representing a 40% reduction.
Biggest outflow for GBTC thus far https://t.co/g6wdrTPOhE
— Eric Balchunas (@EricBalchunas) March 18, 2024
Despite these outflows, Grayscale has recently filed for the Bitcoin mini trust with the US SEC, indicating continued interest in Bitcoin investment products.
While GBTC experienced substantial outflows, the BlackRock Bitcoin ETF saw a resurgence in activity on the same day, recording one of the biggest inflows of $451 million as indicated by Farside investors data.
This indicates a shift in investor preference towards BlackRock’s offering, possibly influenced by its perceived advantages or market positioning. In contrast, other Bitcoin ETFs saw minimal inflows, with amounts below $10 million, highlighting the dominance of BlackRock in attracting investor funds.
Global BTC ETF Landscape
Bloomberg’s ETF expert Eric Balchunas pointed out shifts in the global Bitcoin ETF scene. The introduction of US spot ETFs, which offer more efficient and liquid choices, has resulted in outflows from Bitcoin ETFs in Europe and Canada.
Investors have pulled out a combined $738 million from Bitcoin products on exchanges in Germany, Canada, and Sweden since the beginning of 2024. This trend highlights the competitiveness of the ETF market, with US ETFs attracting substantial flows compared to their international counterparts.
The decline in Bitcoin ETF inflows and the record outflow from GBTC suggest a reevaluation of Bitcoin investment strategies among institutional and retail investors.
This shift in sentiment could be influenced by various factors, including market volatility, regulatory developments, and evolving investor preferences. As the cryptocurrency market continues to evolve, market participants will closely monitor these trends to gauge the future direction of Bitcoin and other digital assets.
At the time of writing, the price of Bitcoin against the US dollar is currently experiencing volatility, hovering around $64,000. This information is based on the most recent data provided by Coingecko and TradingView.
