Grayscale’s Bitcoin ETF Outflows Continue, Market Inflows Offer Counterbalance – Coinweez

The U.S. Bitcoin spot Exchange-Traded Funds (ETFs) market is experiencing consecutive days of negative flow, largely attributed to persistent outflows from Grayscale. Market data from Tuesday, April 9, show an outflow of $19.48 million from Bitcoin spot ETFs. A larger proportion of these outflows is attributable to the Grayscale ETF that has experienced unprecedented levels of haemorrhage over the past couple of months.  Cryptocurrency Analyst, Colin Wu, highlighted this trend on a recent post on X, drawing attention to the market dynamics.

Despite the overall negative flow, BlackRock iShares Bitcoin Trust (IBIT) witnessed a significant inflow of $128.7 million on the same day. However, this single-day inflow remains notably lower than BlackRock’s 28-day average inflow of $277 million. Following IBIT, Bitwise’s ETF (BITB) saw an inflow of $3.8 million, and Fidelity’s ETF (FBTC) recorded $3 million in inflows. Apart from these, no other asset manager reported positive flow on Tuesday.

On the other hand, Grayscale experienced a substantial outflow of $154.9 million on April 9, effectively counterbalancing the positive flows observed in other ETFs. As a result, the net flow for Tuesday ended up negative, at $19.48 million. Notably, Grayscale’s outflow represented a nearly 50% decrease from the $303 million recorded on Monday. Since the inception of Bitcoin spot ETFs in the United States, Grayscale has seen no positive inflow, with its ETF drained amounts in the excess of $12 billion.

With Grayscale consistently experiencing outflows, the U.S. Bitcoin ETF markets have seen nine days of negative flows in the past 30 days. However, positive flows from BlackRock’s ETF and other ETFs have continuously buoyed the market. As of April 9, the U.S. Bitcoin spot ETF market recorded an inflow of $12.37 billion, despite the challenges posed by Grayscale’s outflows.

Grayscale’s CEO, Michael Sonnenshein, anticipates a stabilization in outflows from the company’s bitcoin (BTC) exchange-traded fund (ETF), as reported by Reuters. Sonnenshein mentioned on a Reuters podcast that some of the selling linked to settlements of bankrupt crypto firms like FTX is diminishing.

Following the approval of spot bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) in January, Grayscale’s product (GBTC) witnessed notable outflows. Existing investors likely divested their shares to invest in these new funds.

Sonnenshein also cited GBTC’s higher fees compared to its competitors as another contributor to the outflows but expects the fund’s fees to decrease over time.

BitMEX Research indicates total outflows from GBTC amounting to $15 billion over the past three months, with daily outflows decreasing from $600 million in March to $303 million and $155 million on Monday and Tuesday of this week, respectively.

Persistent outflows from Grayscale have significantly influenced consecutive days of negative flow in the U.S. Bitcoin spot Exchange-Traded Funds (ETFs) market. Market insights have shed light on this trend, emphasizing its impact on market dynamics. Despite Grayscale’s challenges, inflows to other ETFs like BlackRock’s IBIT and Bitwise’s BITB offer a counterbalance. Grayscale CEO Michael Sonnenshein anticipates stabilization, attributing outflows to settlements and high fees. While challenges persist, the market remains resilient, with potential for stabilization in the future.

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• Source: https://coinweez.com/grayscales-bitcoin-etf-outflows-continue-market-inflows-offer-counterbalance/