In a surprising twist, Grayscale Bitcoin Trust (GBTC) has broken its streak of daily outflows, experiencing its first-ever inflow since its inception.
Since its launch on January 11, 2024, Grayscale’s Spot Bitcoin ETF had consistently faced significant daily outflows, totaling around $17.46 billion. However, on May 3, the ETF saw a remarkable shift, recording inflows exceeding $60 million, as reported by Farside, an investment management firm. This turnaround coincided with similar movements in other Bitcoin ETFs, notably BlackRock’s iShares Bitcoin Trust (IBIT), which saw inflows of $12.7 million.
The total inflows across various Bitcoin ETFs on that day amounted to approximately $378.3 million, with Franklin Templeton’s Spot Bitcoin ETF, EZBC, leading with inflows of $102.6 million.
The unexpected influx surprised industry experts, with Bloomberg senior analyst and ETF specialist Eric Balchunas expressing disbelief and conducting thorough verifications to confirm the development.
Holy crap $GBTC had inflows today. Their 80 day-ish streak is finally over. I had to run my eyes and double check the data but it’s true. https://t.co/I4TTU4q5Q1
— Eric Balchunas (@EricBalchunas) May 3, 2024
This positive shift comes in the wake of significant outflows from 10 US Spot Bitcoin ETFs, including BlackRock’s IBIT, totaling over $563.7 million in a single day. These outflows were possibly prompted by the Federal Reserve’s decision to maintain interest rates, causing a broader downturn in the crypto market.
Despite recent market fluctuations, Bitcoin has rebounded, showing a 6.36% increase in the past 24 hours, surpassing the $60,000 support level to trade at $63,175, according to CoinMarketCap.
Factors contributing to Grayscale’s previous outflows include its high annual management fee of 1.5%, making it the most expensive Spot Bitcoin ETF among all 12 in the US. This fee exceeds even BlackRock’s, the second-largest BTC ETF provider, which charges an average annual management fee of 0.25%.
Additionally, Grayscale’s outflows were partly attributed to reported selling activities associated with insolvent crypto exchange FTX and other defunct cryptocurrency companies. FTX, for instance, sold approximately $1 billion worth of GBTC, while Genesis, a cryptocurrency brokerage for institutional investors, sold nearly 36 million shares in GBTC to acquire 32,041 BTC valued at over $2.1 billion.
