Grayscale Investments has achieved a significant milestone with its Grayscale Bitcoin Trust exchange-traded fund (ETF). After experiencing continuous outflows for nearly four months since its conversion to a spot Bitcoin ETF in January, the fund recorded its first day of net positive inflows on May 3. Preliminary data from Farside reveals that the Grayscale Bitcoin Trust (GBTC) received $63 million in net inflows, following approximately $17.5 billion of outflows since the launch of 11 spot Bitcoin ETFs on January 11. Franklin Templeton’s Bitcoin ETF also saw its highest-ever inflows of $60.9 million, while Fidelity’s Wise Origin Bitcoin Fund led the day’s inflows with $102.6 million. The Bitwise Bitcoin Fund and Invesco Galaxy Bitcoin ETF followed with $33.5 million and $33.2 million, respectively.
The crypto community is now speculating on how this change in events will impact the price of Bitcoin (BTC). Pseudonymous crypto investor DivXman noted that GBTC had been the primary source of sell pressure across all spot Bitcoin ETFs. However, he suggests that the tides may be turning, leading to a decrease in sell pressure and an increase in demand. He explained this to his followers in a post on May 3. Another crypto trader, Jelle, predicted that Bitcoin’s new all-time high is on the horizon, sharing his prediction with his followers on the same day.
In response to the news, crypto trader Jordan Lindsey pointed out that Bitcoin’s price is obviously responding to both outflows and inflows. At the time of publication, Bitcoin’s price had increased by 4.91% over the past 24 hours, reaching $62,840, according to CoinMarketCap data. This recovery follows a period of trading below a key support level at $58,926.
Several factors have contributed to Grayscale’s ongoing outflows since the launch of the 11 spot Bitcoin ETFs. One factor is the high fees associated with GBTC compared to other available ETFs. GBTC has a fee of 1.5%, while other ETFs have fees below 1%. Currently, the cheapest option is Franklin Templeton, which has a fee of 0.19%. Another driver of outflows is the selling off of large amounts of GBTC shares by bankrupt crypto firms FTX and Genesis in an effort to repay creditors. In April, Genesis liquidated approximately 36 million GBTC shares for $2.1 billion to purchase 32,041 Bitcoin.
Overall, the positive inflows for Grayscale’s GBTC and other Bitcoin ETFs have sparked speculation and optimism within the crypto community regarding Bitcoin’s price and future performance.