Key Points
- Grayscale Bitcoin Trust ETF (GBTC) records lowest cash outflow of about $18 million.
- Competition from other spot BTC ETF issuers intensifies, as Bitcoin price regains $70k mark.
After an extended period of significant cash outflows, the Grayscale Bitcoin Trust ETF (GBTC) reported its smallest cash outflow on a recent Thursday. Data from the spot ETF market shows that Grayscale Investments’ GBTC had a total cash outflow of around $18 million.
Since the US SEC approved spot BTC ETFs earlier this year, GBTC has experienced a total outflow of approximately 300,700 Bitcoins, valued at around $15.96 billion.
Bitcoin Spot ETF Net Inflows
According to SoSoValue, the total Bitcoin spot ETF net inflow reached $123 million on the same day. As of that Thursday, GBTC held about 312,878 Bitcoins, valued at approximately $21.8 billion. With 354,890,100 outstanding shares, GBTC was trading around $62.39 as of the preceding Wednesday.
GBTC is facing stiff competition from other spot BTC ETF issuers, notably the iShares Bitcoin Trust (NASDAQ: IBIT), which is backed by BlackRock Inc (NYSE: BLK). Additionally, the IBIT and the Fidelity Wise Origin Bitcoin Fund (BATS: FBTC) hold a total of 411,797 Bitcoins, without a single day of net outflows.
Grayscale’s Strategy to Mitigate Cash Outflows
Grayscale and its team have been striving to halt further outflows in the face of mainstream Bitcoin and digital asset adoption by institutional investors. Grayscale is urging the United States Securities and Exchange Commission (SEC) to approve its Grayscale Bitcoin Mini Trust, which has a lower sponsor fee.
Aside from the GBTC liquidation from crypto-bankrupt firms, investors have been migrating to alternative spot BTC ETF issuers with lower sponsor fees. Currently, GBTC has a sponsor fee of approximately 1.5 percent, compared to the average of about 0.25 percent.
Grayscale CEO Michael Sonnenshein expects the GBTC cash outflow to significantly reduce in the near term as the overall outflow reaches a balance. He believes that as markets mature, GBTC’s fees will decrease.
Sonnenshein is confident that over time, Grayscale will attract more investors to its spot Bitcoin ETF products and others.
Impact on Bitcoin Price Movement
The price of Bitcoin has been trying to rally above $74k in recent weeks without success. The flagship cryptocurrency has gained about 7.7 percent in the past seven days, trading around $70,894 on Thursday during the early London session.
According to a Bitcoin price analysis by a well-known crypto analyst alias Captain Faibik, the BTC price against the US dollar is on the verge of a bullish breakout towards $85k from a daily pennant formation.
