Is Grayscale Bitcoin ETF’s Biggest Daily Outflow Concerning AF?

YEREVAN (CoinChapter.com) — On March 18, Grayscale witnessed over $640 million in Bitcoin withdrawals from its spot Bitcoin ETF, underscoring the largest single-day exodus to date. Despite this, industry observers remain optimistic about the burgeoning momentum of Bitcoin ETFs.

In contrast, Fidelity’s Bitcoin ETF, the second-largest of its kind, experienced a net inflow of $5.9 million, albeit its slowest day of growth. Collectively, these developments culminated in a net outflow of $154.3 million for the sector, indicating a challenging day for Bitcoin ETF investors and sparking discussions about the future stability of crypto investment vehicles.

Grayscale has lagged behind other spot Bitcoin ETFs in terms of attracting capital. That is primarily due to its relatively higher commission fee for handling clients’ investments. The firm recently launched a mini Bitcoin fund to surpass the issue but that has not stopped investors from withdrawing their Bitcoin from GBTC ETF so far.

Bitcoin’s price has significantly decreased by 7.2% to $63,107.47 from its recent peak of $73,797 on March 14, according to CoinGecko. Experts say Bitcoin’s price drop is due to slower ETF investments, the upcoming halving, and a US Federal Reserve meeting on March 20.

Bitcoin ETFs: Limited Traction Among Advisors, Says Industry Experts

Grant Engelbart from Carson Group said that only a few advisers had clients invest in Bitcoin ETFs. On average, these investments made up 3.5% of their total funds.

Eric Balchunas of Bloomberg confirmed that just a few early adopters have significantly invested in Bitcoin ETFs, echoing what fund issuers say.

Balchunas notes that only investors already interested in Bitcoin are starting to inquire and then invest. He describes them as a “handful” of early adopters.

GBTC Sales and ETF Optimism Amidst Market Shifts

Other experts looking at GBTC’s holdings see their large Bitcoin reserves as a sign of optimism in ETF market trends. Commenting on the recent sales, Allesandro Ottaviani suggested on March 19 that GBTC’s pace of selling 9.6k Bitcoin from its 378k holdings is unsustainable, hinting at a slowdown that could be positive for the market.