Since March 14, 2024, the overall cryptocurrency market has been undergoing a price correction mode, with top cryptocurrencies like Bitcoin, Ethereum, Solana, and others experiencing continuous downward momentum. Amidst this, the cryptocurrency asset manager Grayscale’s Bitcoin spot Bitcoin ETF (Exchange Traded Fund) has seen a massive outflow of over $358.8 million on March 21, 2024.
With the current outflow, data from Farside investors highlights a massive GBTC outflow of over $642.5 million observed on March 18, 2024. However, this week’s outflows for Grayscale Bitcoin Trust (GBTC) amount to $1.8 billion, marking the fourth consecutive day of net outflows across all 10 Bitcoin ETFs.
Analyst reaction on GBTC outflow
Analysts believe that much of Grayscale’s outflows could soon slow down, attributing the majority of them to the bankruptcies of crypto firms. Eric Balchunas, an ETF expert and senior Bloomberg analyst, made a post on X (Previously Twitter) stating that,
“The more I think about it, the more likely the uptick in flows is related to the bankruptcies because of the size and consistency. The flows in Feb showed what retail outflows look like, smaller and random patterns. Also, any Gemini/Genesis outflows likely buying BTC w cash, hence market holding up. Takeaway: the worst is probably close to being over. Once it is, only retail will be left, and flows should look more like the Feb trickle.”
As of March 21, Grayscale reported $23.2 billion in assets under management for its Bitcoin Trust, but it has relieved $13.6 billion since converting to an ETF on Jan. 11.
Independent researcher ErgoBTC suggested that about $1.1 billion worth of GBTC outflows in recent weeks may be linked to bankrupt crypto lender Genesis. This observation is supported by the timing and volumes of funds moving out of GBTC and into Genesis.
Crypto community reaction on GBTC outflow
Besides all these, Whale Panda, a crypto market commentator, made a post on X, highlighting Genesis’s statement on March 19, 2024, indicating that the firm would be returning assets to creditors by selling GBTC shares for Bitcoin. This follows Genesis’s court approval on Feb. 14 to liquidate its $1.3 billion worth of GBTC shares to repay creditors. Prior to this, bankrupt cryptocurrency exchange FTX had liquidated its entire holdings of 22 million GBTC shares, valued at nearly $1 billion.
Currently, the overall market is dull, and the world’s biggest cryptocurrency, Bitcoin, is trading near $66,400 in the last 24 hours, experiencing a downside momentum of over 1%. However, in the past week, Bitcoin lost around 3% of its gain. Whereas, in the last 30 days, Bitcoin experienced a price surge of over 28%, which in the longer period highlights Bitcoin’s bullishness.
