Are Grayscale outflows nearing their end?
According to senior market analysts on Wall Street, the recent outflows driven by FTX and arbitrage funds may be coming to an end. It's estimated that the entire FTX position of 22M GBTC shares has been sold, and arbitrage funds, which were around $5B in the final months before approval, would have exited soon after the discount closed.
Interestingly, January 24 marked one of the lowest days in net outflows from the Grayscale Bitcoin Trust ETF (GBTC), with the third consecutive day of declining outflows. This could signal the start of a slowdown in trades.
Grayscale currently holds about 537,000 Bitcoin, valued at around $20.6B, with $4.4B in net outflows since the ETF conversion. Despite seeing almost 15,000 Bitcoin outflows daily, there's no limit preventing even greater outflows.
Analysts were initially surprised that outflows weren't larger, which would have led to a quicker floor in the market. They observed roughly equal amounts of outflows each trading day so far.
Analysts also believe that the selling pressure drivers are nearly exhausted. It's estimated that the FTX liquidation is complete, and most arbitrage/opportunistic funds that were buying in the three months prior to ETF approval have now sold or are nearly sold out of the trade.
Three months before Grayscale’s ETF conversion, there was approximately $8B in notional buying.
Recently, a friend of mine who has been a Grayscale customer for many years mentioned, "I've been in GBTC for several years in tax-deferred accounts and just switched to FBTC and IBIT due to the lower fees. I think Grayscale is making a mistake keeping their fees so high."
Isn't he absolutely right about where we stand in the spot BTC ETF market?
Stay well, stay in crypto ! :)
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