Grayscale’s Bitcoin exchange-traded fund (ETF) experienced significant outflows on March 21, with approximately $359 million leaving the fund. This follows a week of large outflows, with $642 million on March 18 being the highest recorded in a single day. However, analysts believe that this trend may soon come to an end.
The outflows for Grayscale’s Bitcoin Trust (GBTC) have decreased since Monday. This week alone, the total outflows for GBTC reached $1.8 billion, and it marks the fourth consecutive day of net outflows for all 10 Bitcoin ETFs.
Eric Balchunas, a senior Bloomberg ETF analyst, speculates that the majority of Grayscale’s outflows are a result of bankruptcies in the crypto industry. He suggests that once these outflows subside, only retail investors will remain, and the flows should resemble a slower trickle similar to February.
As of March 21, Grayscale’s Bitcoin Trust holds $23.2 billion in assets under management. Since its conversion to an ETF on January 11, GBTC has lost $13.6 billion.
ErgoBTC, an independent researcher, supports Balchunas’ theory, suggesting that approximately $1.1 billion of GBTC outflows over the past few weeks can be attributed to bankrupt crypto lender Genesis.
WhalePanda, a pseudonymous crypto market commentator, also shares a similar sentiment. They point to a statement from Genesis on March 19, which stated that the firm would be returning assets to creditors by selling GBTC shares for Bitcoin.
Genesis received court approval on February 14 to liquidate its $1.3 billion worth of GBTC shares to repay its creditors. Prior to this, bankrupt exchange FTX sold 22 million GBTC shares, completely liquidating its holdings.
In related news, the CEO of Trezor, a popular cryptocurrency wallet, believes that Bitcoin ETFs make platforms like Coinbase attractive targets for hackers and government scrutiny.