Grayscale’s Bitcoin (BTC) exchange-traded fund (ETF) has experienced significant outflows recently, with $359 million leaving the fund on March 21. However, analysts believe that this trend may soon come to an end.
The Grayscale Bitcoin Trust (GBTC) saw outflows of $358.8 million on March 21, following a week of massive outflows. On March 18, the fund experienced its largest day of outflows on record, with $642 million leaving the fund, according to data from Farside Investors.
The outflows from GBTC have started to slow down since Monday, indicating that the worst may be over. Senior Bloomberg ETF analyst Eric Balchunas believes that much of the outflows from Grayscale can be attributed to bankruptcies of crypto firms, which were forced to sell their holdings. Balchunas speculates that once these outflows subside, only retail investors will be left, and the flows should become more stable.
As of March 21, Grayscale reported that its Bitcoin Trust held a total of $23.2 billion in assets under management. Since converting to an ETF on January 11, GBTC has lost $13.6 billion.
Independent researcher ErgoBTC suggests that a significant portion of the recent outflows, around $1.1 billion, may have come from bankrupt crypto lender Genesis. The timing and volume of the outflows from GBTC align with the inflows into Genesis, indicating a possible correlation between the two.
Crypto market commentator WhalePanda also supports this theory, pointing to a statement from Genesis on March 19, where the firm announced that it would be returning assets to creditors by selling GBTC shares for Bitcoin.
In conclusion, while Grayscale’s Bitcoin ETF has been experiencing significant outflows recently, analysts believe that this trend may soon come to an end. The majority of the outflows are likely due to bankruptcies of crypto firms, and once these outflows subside, the market should stabilize.