The Grayscale Bitcoin Trust (GBTC) has surprised the market by experiencing significant inflows for the first time since its launch on January 11, 2024. After facing massive outflows totaling $17.5 billion, GBTC recorded approximately $63 million flowing into the fund on May 3, 2024, bringing an end to 82 consecutive days of pullbacks.
This unexpected reversal in flows aligns with a notable day for the Bitcoin ETF market as a whole, with $378.3 million flowing into various funds. Notable highlights include BlackRock’s iShares Bitcoin Trust, which saw an addition of $12.7 million, and Franklin Templeton’s EZBC, which led with an inflow of $102.6 million.
The surprising influx of funds prompted Eric Balchunas, senior ETF analyst at Bloomberg, to reevaluate his analysis to ensure the accuracy of the data.
GBTC had previously faced challenges due to its high management fees of 1.5%, well above the US market average. In comparison, BlackRock charges just 0.25% for its Bitcoin ETF. Additionally, GBTC’s association with failed cryptocurrency companies, exemplified by significant sales by FTX, contributed to the exodus of investors. FTX offloaded around $1 billion worth of GBTC.
Another negative impact on GBTC’s performance came from Genesis, a cryptocurrency exchange, which liquidated nearly 36 million shares of GBTC to acquire 32,041 BTC, valued at over $2.1 billion at the time.
The recent influx of funds into the Grayscale Bitcoin Trust indicates a potential shift in investor confidence in the cryptocurrency ETF market. It suggests a possible stabilization after a period of high volatility.
At the time of publication, the price of BTC was quoted at $64,232.42, reflecting a 1% increase in the last 24 hours.
Disclaimer: The views and opinions expressed in this article, by the author or anyone mentioned, are solely for informational purposes and do not constitute financial, investment, or other advice. Investing or trading cryptocurrencies carries the risk of financial loss.