Grayscale Spot Bitcoin ETF Turns Positive After $17.5 Billion In Outflows, Sees Inflows For The First Time

In a rather shocking development, Grayscale Bitcoin Trust (GBTC) has recorded its first-ever inflow after witnessing significant daily outflows since its launch. 

Grayscale Bitcoin ETF Records Over $60 Million In Inflows

Grayscale’s Spot Bitcoin ETF has finally broken its 82-day streak of outflows since its launch on January 11, 2024. GBTC saw its first day of inflows on May 3, after witnessing approximately $17.46 billion in outflows. 

According to data from Farside, an investment management firm, Grayscale’s Spot Bitcoin ETF had amassed inflows of about $63 million, alongside other Bitcoin ETFs like BlackRock’s iShares Bitcoin Trust (IBIT) which had inflows of $12.7 million. 

The total inflows recorded in that single day amounted to approximately $378.3 million, with Franklin Templeton’s Spot Bitcoin ETF, EZBC, leading the pack with the highest inflows of $102.6 million. 

Expressing disbelief at Grayscale’s turnaround, Bloomberg senior analyst and ETF expert, Eric Balchunas remarked that he had to make thorough verifications to confirm the unexpected development. 

Moreover, the surprising influx comes after a recent occurrence which saw 10 US Spot Bitcoin ETFs, including BlackRock’s IBIT, collectively recording enormous outflows worth over $563.7 million in a single day. These outflows were possibly triggered by the Federal Reserve’s (FED) decision to keep rates unaltered, resulting in a broader downturn in the crypto market. 

BTC had also experienced significant declines around the same time, however, currently the cryptocurrency is up by 6.36% in the past 24 hours, jumping above $60,000 support levels to trade at $63,175, according to CoinMarketCap. 

Factors Behind GBTC’s Massive Outflows

Grayscale saw its first recorded inflow after experiencing hundreds of millions worth of daily outflows since its inception. The asset management firm’s Spot Bitcoin ETF had also experienced its highest outflow of approximately $589.9 million on February 29. 

Various factors have contributed to GBTC’s daily outflows, including its exorbitant annual management fee of 1.5%. Compared to all 12 Spot Bitcoin ETFs in the United States (US), Grayscale has the most expensive Spot Bitcoin ETF fee, exceeding even BlackRock, the second largest BTC ETF provider, which has an average annual management fee of 0.25%. 

Some of Grayscale’s outflows were also a result of a reported selling connection with insolvent crypto exchange, FTX and other defunct cryptocurrency companies. FTX had sold about $1 billion worth of GBTC while Genesis, a cryptocurrency brokerage for institutional investors had sold almost 36 million shares in GBTC to purchase 32,041 BTC worth more than $2.1 billion.