KEY POINTS
- A Bloomberg analyst said he had to double check to make sure that it was an inflow
- Some users were bullish, but most were confused, saying the investor had better alternatives
- Grayscale recently announced a 'mini' version of its GBTC, with a much smaller fee
Asset investment firm Grayscale's spot Bitcoin exchange-traded fund (ETF) GBTC has finally broken its months-long outflows streak as it saw its first inflow, and the cryptocurrency industry has mixed reactions to the development.
Grayscale's Bitcoin Trust saw a $63 million inflow Saturday, as per on-chain data tracked by British investment firm Farside Investors. Crypto analysts, enthusiasts, and users alike shared their thoughts on development, considering how GBTC's infamous outflows streak since the products' approval in January became a thorn in the historic journey of spot BTC ETFs.
Bitcoin ETF Daily Flow
— Farside Investors (@FarsideUK) May 3, 2024
GBTC US$ Flow: 63 million
For all the data and disclaimers visit:https://t.co/4ISlrCgZdk
Bloomberg analyst Eric Balchunas led the way in commenting on the inflow. "I had to run my eyes and double check the data but it's true," he wrote on X (formerly Twitter). He noted that GBTC had an "80 day-ish [outflows] streak" before the fresh funds came through Saturday.
Holy crap $GBTC had inflows today. Their 80 day-ish streak is finally over. I had to run my eyes and double check the data but it’s true. https://t.co/I4TTU4q5Q1
— Eric Balchunas (@EricBalchunas) May 3, 2024
Prominent BTC investor Lark Davis had a bearish view of the development, as with several others who said whoever made the inflow had other better options instead of Grayscale's GBTC.
But why would anyone do that? Haha
— Lark Davis (@TheCryptoLark) May 4, 2024
As respectfully as possible: Who on earth would buy it over the alternatives? And why?
— Spencer Hakimian (@SpencerHakimian) May 3, 2024
One user suggested that the inflow may be related to Grayscale's recently announced Bitcoin Mini Trust (BTC Trust), a "mini" version of the GBTC offering but with a significantly lower fee.
Even with many users confused about the move – considering Grayscale has the highest fee among other spot Bitcoin ETF issuers – a few were bullish about the inflow. One said that it seems Grayscale "is preparing a glorious comeback," and another said this week will be "big" for GBTC.
The unpopular GBTC has been on a downward trend since January, with its Bitcoin holdings plummeting by more than half since the products started trading. The asset manager's holdings were at around 619,220 BTC when spot BTC ETF trading started, but in mid-April disclosures, it was revealed that Grayscale held only over 309,000 BTC.
In comparison, BlackRock's iShares Bitcoin Trust (IBIT) has been on a significant climb. With a 0.12% charge compared to GBTC's 1.5% fee, IBIT hit a new milestone late last month by logging 70 consecutive days of inflows. The figure is far from the 160-day inflow streak of JPMorgan's JEPI, but in an emerging industry that has faced and still faces many critics, IBIT's achievement is one of the books.
Meanwhile, in the greater Bitcoin ETFs circle, some industry experts remain bullish that the funds have a bright future. Hunter Horsley, CEO of Bitwise Investments, the world's largest digital asset index fund manager, predicted that at the end of the year, people will be shocked when "many wealth management firms" begin offering their own Bitcoin ETFs.
