Grayscale’s Spot Bitcoin ETF Sees Positive Turnaround With Inflows Surpassing $60 Million

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.

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.