Key Points
- Bitcoin (BTC) may be experiencing a shift in momentum as institutional BTC outflows decrease.
- The Grayscale Bitcoin Trust (GBTC) experienced a loss of $170 million on March 22.
Institutional outflows of Bitcoin (BTC) may be slowing down, indicating a potential shift in momentum. The Grayscale Bitcoin Trust (GBTC) reported a loss of just $170 million on March 22.
US Spot Bitcoin ETFs in Spotlight
US Spot Bitcoin exchange-traded funds (ETFs) have been the focus of discussion for possibly the wrong reasons recently. Compared to the beginning of March, inflows have significantly decreased while GBTC outflows have reached record highs, resulting in five consecutive days of net reductions in assets under management (AUM).
The timing of these changes doesn’t seem coincidental. Reports suggest that Genesis, a bankrupt crypto lender, has been selling its GBTC position throughout the week. If this selling has now ended, the downward pressure on ETF trends may ease.
Changing Trends in Bitcoin ETF Flows
Investor and entrepreneur Alistair Milne noted a significant slowdown in GBTC selling, leading to a drop in Bitcoin ETF net outflows. This observation led him to question if the momentum was shifting.
Statistician Willy Woo, creator of on-chain data resource Woobull, also shares this theory. He recently introduced a new model comparing ETF inflows with BTC price action, suggesting that the most intense phase of offloading might be over.
Crypto commentator WhalePanda also expressed optimism about near-term BTC price action. He believes that conditions for a return to price discovery could be in place by next week.
However, some are critical of GBTC, which now holds barely half of the AUM it had when it converted to an ETF in January. Crypto author and educator Vijay Boyapati argued that the entire ecosystem would be healthier once GBTC has zero AUM.
Despite the criticism, spot Bitcoin products represent the most successful ETF launch in history, with cumulative flows reaching $12.15 billion. Cathie Wood, CEO of ARK Invest, one of the ETF providers, stated that the majority of institutional exposure is still on the horizon.
