Spot bitcoin ETF flows turn positive again as GBTC outflows taper

The assets leaving Grayscale Investment’s spot bitcoin ETF hit a new single day low, helping the broader fund category end a two-day net outflow streak. 

The Grayscale Bitcoin Trust ETF (GBTC) saw $17.5 million of net money leave its fund Wednesday, according to Farside Investors data. The total was a record low and reflected a substantial dip from net outflows of $303 million on Monday and $155 million on Tuesday. 

Helped by the shrunken GBTC outflow total Wednesday, the 11-fund US spot bitcoin ETF segment notched net inflows of $124 million. 

The BTC funds cumulatively endured net outflows of $224 million and $19 million on Monday and Tuesday, respectively, the data shows.

Bitcoin’s price hovered around 70,440 at 7:30 a.m. ET — up nearly 7% from a week ago.

Grayscale’s bitcoin product has seen net outflows every trading day since converting to an ETF on Jan. 11. The GBTC asset oozing peaked at $642 million on March 18.

The trust’s hemorrhaging of assets was somewhat expected, in part because of GBTC’s 1.5% fee — a significantly higher price point than the nine competing spot bitcoin ETFs that launched on the same day.

GBTC’s net outflows of $17.5 million on Wednesday fell below the previous low of $22 million on Feb. 26. 

ETF.com senior analyst Sumit Roy told Blockworks at the time that he believed the initial selling by arbitrageurs and those wanting to move to cheaper funds was “largely over.” GBTC outflows ramped up in the days after, however, rising to nearly $600 million on Feb. 29.

Some segment observers attributed continued GBTC outflows in recent weeks to bankrupt lender Genesis offloading its shares of the fund. The company’s stake in the Grayscale fund was worth roughly $1.6 billion in mid-February.   

But Genesis and its affiliates had “fully monetized” their nearly 36 million GBTC shares as of April 2, court documents note — and proceeds of the sales were used to buy 32,041 BTC. 

“I think it’s much too soon to call the end of GBTC’s outflows,” Roy told Blockworks Thursday. “We need to see many days of small outflows — or even inflows — before we can make that call.”

The GBTC ETF’s net outflows stand at nearly $16 billion overall. Despite that total weighing down the broader US spot bitcoin fund category down, the segment has notched $12.5 billion of net inflows during their three months on the market.