Grayscale (GBTC) Loses Momentum; Outflows Outpace Combined Spot Bitcoin ETFs Inflows
The US spot Bitcoin ETFs recorded $11.29 million in inflows on Thursday, May 9, with Grayscale's GBTC taking the lead.Interestingly, most of the spot BTC ETFs recorded positive net inflows and zero outflows, meaning GBTC's massive outflows canceled the overall fund inflow.
Bitcoin Investment Inflows and Outflows Signal Potential ShiftOn Thursday, most spot Bitcoin exchange-traded funds (ETFs) in the US saw a small combined outflow of $11.29 million, with Grayscale's GBTC as the major culprit.
Sosovalue data reveals BlackRock's IBIT saw an inflow of $14 million, while Bitwise recorded $7 million in inflows. Funds from Ark Invest, Fidelity, Galaxy Digital, Franklin Templeton, and Invesco got combined net inflows totaling $11 million.
The $43 million in outflows from Grayscale's GBTC obscured these inflows. Meanwhile, spot BTC ETFs from WisdomTree, Valkyrie, Hashdex, and VanEck recorded zero capital flows.
Despite the recent outflow, it's important to consider the broader picture. The spot BTC ETFs attracted significant investor interest. According to theblock, since their launch in January, US the 11 spot Bitcoin ETFs have accumulated a significant net inflow of $11.76 billion.
However, the total trading volume of these ETFs has been steadily declining since peaking in early March, when Bitcoin attained its $73,750 all-time high. This suggests that investor interest is dwindling amid the recent market downturn and other geopolitical and economic events.
Grayscale Outflows Surge Despite Steady RevenueAmid the notable outflows in Grayscale's GBTC, the company's first-quarter revenue has remained flat at $156 million. According to reports, Grayscale's GBTC recorded a whopping $17.4 billion in outflows since converting to a spot exchange-traded fund (ETF) in January.
These outflows could be hinged on the fund's high management charges compared to rival ETFs. Investors seek where things are easier, like lower-cost Bitcoin ETFs offered by companies like BlackRock and Fidelity.
Notably, Grayscale charges a 1.5% management fee, which seems hefty compared to some competitors offering fees as low as 0.3%. In response to this challenge, Grayscale announced plans to launch their own lower-fee Bitcoin Mini Trust" to win back investors.
Bloomberg's Analyst Shared Insight on Bitcoin ETFEric Balchunas, an ETF expert at Bloomberg, shared his views on the recent Bitcoin ETF market trends. He noted a positive shift where Bitcoin ETFs in the US saw net inflows without outflows for the first time.
Balchunas remarked that over 95% of ETF investors held positions despite a persistent downturn, showcasing resilient sentiment. While there's movement in the inflows and outflows, ETFs generally experience net growth over time.
Like the United States, Hong Kong has also moved forward in developing Bitcoin ETFs. However, data from Farside reveals that the US BTC ETFs are still more significant than those of Hong Kong.
Though smaller than the US, the Hong Kong ETF market is rapidly growing. Balchunas acknowledged this in his X post but highlighted its rapid growth potential.
Yeah as we advised don't expect big numbers in HK vs US (which is in league of own ETF-wise) but.. the the HK ETFs at $310m is equiv to $50b in US market. So in that regard these ETFs already as big to their local mkt as US ones are to its. https://t.co/4dIqAiZppJ
- Eric Balchunas (@EricBalchunas) May 6, 2024
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