Grayscale’s GBTC ETF is once again weighing on bitcoin with capital flight of hundreds of millions of dollars.
Grayscale’s shadow looms again
Bitcoin is down 4% since the start of the week. It is 12% lower than the ATH of $73,000 reached just a few days ago and is currently trading around $64,000.
For once, it is the exits from the GBTC ETF which are responsible for this decline. They reached 643 million dollars this Monday. This is the largest capital flight since its conversion into an ETF on January 11:
The exodus of customers from Grayscale should continue due to its management fees seven times higher than those of the competition. However, the law prohibits ETFs from returning their clients’ money directly to BTC. These must first be converted into dollars. Hence the downward pressure caused by Grayscale.
Net outflows from ETFs totaled $154 million on Monday. This hasn’t happened since March 1st. That said, BlackRock’s ETF still shows impressive volumes. Its iShare ETF offset Grayscale’s hemorrhage with inflows of $451 million.
Here is the number of bitcoins held by the different ETFs as of March 18:
-BlackRock: 237,339 BTC
-Fidelity: 134,889 BTC
-ARK: 39,829 BTC
-Bitwise: 29,529 BTC
-Vaneck: 7,721 BTC
The Valkyrie, Invesco, Franklin and Wisdom Tree ETFs share the crumbs (15,945 BTC). The GBTC ETF for its part holds 368,600 BTC, a drop of 40% since January 11. How much of this capital flight has already rotated to other ETFs? Hard to say.
In total, the new ETFs have already attracted 465,000 BTC, but “only” 214,000 BTC net, due to Grayscale’s shenanigans.
Regardless, overall demand remains strong. The vice-president of Carson Group declared on Bloomberg that some of its managers transfer on average 3.5% of their portfolio from stocks to bitcoin:
Knowing that more than 140,000 billions of dollars are under management on a global scale. So we’re talking about $5 trillion. Also knowing that it only took around fifteen billion dollars to double the value of bitcoin…
Standard Chartered Bank estimates that ETFs will only need to attract $75 billion (currently $15 billion) to reach $250,000 for a bitcoin.
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