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Grayscale’s Bitcoin Trust GBTC Records Lowest Daily Outflows
Grayscale’s flagship Bitcoin Trust GBTC has recently recorded the lowest daily outflows since it converted to an ETF. According to data posted on X by the research arm of crypto exchange BitMEX, GBTC’s outflow on February 23 was just $44.2 million.
Bitcoin ETF Flow on February 24, 2024
All data is now in, except perhaps for the Galaxy/Invesco product. Friday saw strong performance, with +$232.3m of net inflow. The outflow for GBTC was just $44m, which was the lowest level since January 11.
This marks its lowest daily outflow since launching as an ETF on January 11, when the Bitcoin investment fund recorded outflows of $95.1 million. Altogether, Grayscale’s outflows have hit $7.4 billion. Other popular funds, like Blackrock and Fidelity, have attracted $6.6 billion and $4.7 billion in inflows respectively.
Indications of Another Selloff
There are indications that another selloff is on the way. Recently, a bankruptcy court approved the bankrupt lender Genesis to sell $1.3 billion in GBTC shares to repay its creditors. Parent company Digital Currency Group (DCG) has legally challenged the plan, objecting to the method of accounting and the value of Genesis creditors’ claims.
Bitcoin was trading around $24,000 at the time of Genesis’ filing for bankruptcy in early 2023, and today it changes hands at over $51,000.
Grayscale Finding Balance
Grayscale’s GBTC is technically the largest ETF at $23 billion AUM, but it has had a lengthy head-start over its competitors. GBTC started as a Bitcoin fund in 2013, but it always had its eye on eventually converting to an ETF.
Since the US Securities and Exchange Commission approved nearly a dozen ETFs last month, Grayscale’s has been the only one posting outflows.
In 2022, the SEC refused its application to convert to an ETF. Grayscale took the matter to a Federal appeals court and on August 29, 2023, scored a landmark victory for the industry when Judge Neomi Rao overturned the SEC’s rejection, calling it “arbitrary and capricious.”
The closed-end GBTC evaporated along with the discount after GBTC converted to an ETF, simultaneously ending one of crypto’s most popular arbitrage trades.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
