KEY POINTS
- GBTC saw lowest outflow on its day 9 and day 10 of trading
- Bitcoin reclaimed the $42,000 price level on Friday
- At 7:34 p.m. ET on Sunday, Bitcoin exhibited positive performance by trading at $42,002.67
Bitcoin staged a robust resurgence and recaptured the $42,000 price threshold as Grayscale Investment's GBTC experienced its most minimal outflow since commencing trading activities.
The cryptocurrency exhibited notable resilience after a temporary downturn following the regulatory green light for a spot Bitcoin exchange-traded fund (ETF) in the United States.
Since transitioning to trade as a spot Bitcoin exchange-traded fund (ETF) on January 11, the Grayscale Bitcoin Trust (GBTC) has experienced an outflow of approximately $4.8 billion from its holdings.
Concurrently, Bitcoin, the world's largest cryptocurrency by market capitalization, underwent a nearly 20% decline, dipping below the $40,000 price threshold during the same period.
As the week drew to a close, the Bitcoin market witnessed an upward trajectory, driven by a growing sentiment among investors that the outflows from the Grayscale Bitcoin ETF (GBTC) might be entering a deceleration phase.
Initially, Bitcoin traded above the $41,000 level and subsequently surged to reach a weekly peak at $42,202, marking a substantial 6% gain.
Notably, on its tenth day of trading, GBTC recorded a closing value of $394.1 million, representing an 8% decrease compared to the previous trading day, according to data provided by Bloomberg Intelligence ETF analyst James Seyffart.
Update for day 10 of the #Bitcoin ETF Cointucky derby. Volumes and flows are both slowing down a bit. Another slight negative day on flows. Total net flows stand at +$744 million. $IBIT likely crosses 2 billion in assets today pic.twitter.com/apSLYRT6Vp
— James Seyffart (@JSeyff) January 26, 2024
Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, highlighted that although the reported figure is deemed "low" in comparison to previous levels, it still represents a significant amount.
"Outflows today were 'only' $425m, lowest bleed since day one and seemingly trending down. That said it's still a pretty large number," Balchunas said in a tweet, adding, "This number confirms the futility of looking at wallets all day as some kind of predictor of flows. Those had wildly higher numbers today. If anything, it's volume that has become the best predictor, low volume = less bad outflows," Balchunas said last Thursday.
The good news: GBTC outflows trending down. The bad news: so are the Nine's. That leaves us with TOTAL ROLLING NET FLOWS of +$824m. Also $ARKB and $BITB crossing half a billion is remarkable. For any normal launch in first month that's considered blockbuster-level success. https://t.co/jPtlxhMtwP
— Eric Balchunas (@EricBalchunas) January 25, 2024
The prevailing optimism surrounding Bitcoin experienced a notable boost in the wake of a recent pronouncement by analysts at JP Morgan.
They indicated that the phase of profit-taking within the Grayscale Bitcoin Trust (GBTC) has substantially abated.
Previously, JP Morgan had forecasted an outflow of approximately $3 billion from GBTC, driven by investor interest in exploiting the ETF's discounted trading value relative to the actual Bitcoin market value.
Analysts underscored the significance of this development, noting that the majority of the downward pressure exerted on Bitcoin by this particular channel appears to be largely in the rearview mirror.
This assessment is grounded in the fact that approximately $4.3 billion has already exited the GBTC fund, signaling a potential stabilization of this market dynamic.
At 7:34 p.m. ET on Sunday, Bitcoin exhibited positive performance by trading at $42,002.67, accompanied by a substantial 24-hour trading volume of $16,847,080,326.
This recent price movement signifies a 0.01% increase within a single day, and a modest 1.23% gain over the past seven days.
In terms of its supply dynamics, Bitcoin's circulating quantity currently stands at 19,611,731 BTC.
Furthermore, it maintains its status as the leading cryptocurrency globally, boasting an impressive market capitalization of $823,589,414,764, as per the most recent data sourced from CoinMarketCap.
