GBTC Records Record Outflows as BTC Dips 5%

• Grayscale’s Bitcoin Trust (GBTC), now a spot Bitcoin ETF, experienced its largest single-day outflow on March 18.
• Bitcoin’s price dipped slightly, remaining steady despite significant outflows from Bitcoin ETFs.

The cryptocurrency market recently witnessed a significant event, with Grayscale’s Bitcoin Trust (GBTC) undergoing its largest day of outflow since its transformation into a spot Bitcoin Exchange-Traded Fund (ETF). This movement saw an exodus of over $640 million from the fund, particularly impacting the Bitcoin ETF landscape in the third week of March.

A recent analysis presented in a CNF YouTube video delves into the details of this occurrence. On March 18, GBTC, which has been converted into a spot Bitcoin ETF, experienced a record outflow of $642.5 million. This event marked the most substantial single-day loss since its transition to an ETF format on January 11.

Concurrently, Fidelity’s Bitcoin ETF also encountered a downturn, recording its lowest inflow at $5.9 million. These developments collectively resulted in a net outflow of $154.3 million from spot Bitcoin ETFs. Despite these outflows, Bitcoin’s price has remained relatively stable at $65,875, only slightly lower than its all-time peak of $73,797, reached on March 14.

Analysts are attributing this market behavior to several factors, including the impending Bitcoin halving event and an upcoming key Federal Reserve meeting. However, there’s a sense of optimism among some experts regarding future inflows into Bitcoin ETFs. For instance, Grant Engelbart of Carlson Group reported modest allocations in Bitcoin ETFs among his firm’s advisors.

Bloomberg ETF analyst Eric Balchunas highlighted that the current interest in Bitcoin ETFs primarily stems from early adopters. In a discussion with Scarlet Fu and Katie Greifeld on Bloomberg ETF IQ, Engelbart, vice president and investment strategist at Carson Group, mentioned that only a “handful” of advisors are allocating an average of 3.5% to Bitcoin ETFs in client household portfolios.

Only a “handful” of advisors have allocated to bitcoin ETFs but the avg allocation was 3.5%, according to Carson Gp, one of the earliest advisor platforms to onboard the ETFs via ETF IQ https://t.co/VIAVw9BAGc

— Eric Balchunas (@EricBalchunas) March 18, 2024

Looking ahead, the focus remains on GBTC, which still possesses approximately 370,000 Bitcoin. This substantial reserve is perceived as a promising indicator for the long-term prospects of ETF flows. The transition of Grayscale and other major fund issuers to spot ETFs signifies a notable evolution in the cryptocurrency investment arena.

It’s also important to acknowledge that Bitcoin has been facing pressure for a while. Previously, CNF reported that a sell-off in GBTC spurred a 3% correction in Bitcoin’s price, bringing it near $60,000. Experts warned of potential further corrections. During the time of these developments, Bitcoin’s price indeed experienced a decrease of 5.64% in a single day and 10.21% over the past week, positioning its value around $64,722.