After the conversion of Grayscale’s GBTC into a Bitcoin spot ETF, it has continued to face significant outflows, leading to a continuous decline in Bitcoin. In the first 8 trading days following the successful conversion, GBTC experienced a net outflow of nearly $4 billion. Bloomberg analysts predict that the final outflow rate of GBTC will be between 20% and 35%. However, at least one-third of these outflows are expected to be reinvested in Bitcoin.
Since the approval of the Bitcoin spot ETF on the 10th, Bitcoin has been continuously declining. It even fell below $39,000 last night, reaching a new low since December last year. The market widely believes that this is due to GBTC investors continuously closing their positions due to the near-zero premium and high management fees.
Data from BitMEX Research shows that on the 8th trading day after the listing of the Bitcoin spot ETF, there was a net outflow of $487 million. Within 8 days, there was a net inflow of $601 million. On the 8th day, GBTC experienced a net outflow of $515.3 million, with a total net outflow of $3.963 billion within 8 days.
It should be noted that today’s outflow of $515.3 million from GBTC is lower than yesterday’s $640 million, and the current discount relative to the net asset value of GBTC has significantly decreased (currently at a negative 0.11%). This may indicate a decrease in selling pressure on GBTC.
Bloomberg analyst Eric Balchunas tweeted that GBTC has already experienced a 13% outflow. As for the future outflow rate of GBTC, another Bloomberg analyst, James Seyffart, predicts that it will be higher than 20% but not exceed 35%.
However, James Seyffart believes that at least one-third of the funds flowing out of GBTC will be reinvested in Bitcoin, perhaps even more than half. These investors may choose to invest directly in Bitcoin or switch to other ETFs with lower fees.
James Seyffart expects that with the outflow from GBTC, the Bitcoin spot ETF will still attract a net inflow of $10 billion this year. The current net inflow is $1.1 billion, indicating that there is still a long way to go.
When the Bitcoin spot ETF was just approved, GBTC held over $25 billion worth of Bitcoin. Ran Neuner, co-founder and CEO of Onchain Capital, warned earlier that Bitcoin may face a period of selling pressure. $25 billion is a significant position, and even if only 20% is redeemed, it would mean $5 billion of selling pressure in the market.
According to Arkham Intelligence, GBTC still holds about 558,000 Bitcoins, equivalent to about $221.5 billion. It is expected that in the short term, the trend of Bitcoin may continue to be volatile.
At the same time, the bankrupt cryptocurrency exchange Mt. Gox sent a recent email to its creditors stating that it will begin the claims process. Yang Mindao, founder of dForce, warned yesterday that Mt. Gox may unlock 200,000 Bitcoins in the next two months to pay off creditors. This implies the potential for additional significant selling pressure on Bitcoin.
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