Negative inflows observed as GBTC loses $642M within a day, impacting spot Bitcoin ETFs.

On March 18, Grayscale’s spot Bitcoin exchange-traded fund (ETF) experienced the largest outflow on record, with over $640 million worth of Bitcoin flowing out of the fund. This marked a significant decrease in investor confidence since its conversion to a spot ETF on January 11. Fidelity’s Bitcoin ETF also saw a decrease in inflows, reaching its lowest point with just $5.9 million on the same day. As a result, there was a net outflow of $154.3 million for spot Bitcoin ETFs. The price of Bitcoin currently stands at $65,875, a 10.5% drop from its all-time high of $73,797 on March 14. Analysts attribute this decline to the slowing Bitcoin ETF flows, the upcoming halving event, and the Federal Reserve’s Federal Open Market Committee meeting on March 20. Despite this, some analysts remain optimistic about the future of Bitcoin ETF flows. Grant Engelbart, vice president of investment firm Carson Group, revealed that only a few of his firm’s advisors have seen clients investing in Bitcoin ETFs, with an average allocation of 3.5% of total funds. Other market commentators also suggest that Bitcoin ETF inflows could continue to increase in the future. They point to the remaining amount of Bitcoin on GBTC’s books, approximately 370,000 BTC, as a reason for a long-term bullish outlook on ETF flows. It is worth noting that Grayscale Bitcoin Trust converted from an institutional fund to a spot ETF on January 11, alongside the approval of nine other spot Bitcoin ETFs from fund issuers such as BlackRock and Fidelity.