On March 18, Grayscale’s spot Bitcoin exchange-traded fund (ETF) experienced the largest outflow in its history, with over $640 million worth of Bitcoin flowing out. This marked a significant decrease in the fund’s assets since its conversion to a spot ETF on January 11. In contrast, Fidelity’s Bitcoin ETF, the second-largest fund, only saw inflows of $5.9 million on the same day, its lowest recorded amount. As a result, there was a net outflow of $154.3 million from spot Bitcoin ETFs. The current price of Bitcoin is $65,875, a 10.5% drop from its all-time high of $73,797 on March 14.
Experts have attributed the recent decline in Bitcoin ETF flows to several factors, including the upcoming halving event and the Federal Open Market Committee meeting of the United States Federal Reserve on March 20. These events have contributed to the recent decrease in BTC’s price. However, some analysts remain optimistic about the future of Bitcoin ETF flows.
Grant Engelbart, the Vice President of investment firm Carson Group, revealed that only a few of their advisers have seen clients allocate funds to Bitcoin ETFs. The average investment ratio for these allocations is around 3.5% of total funds. Bloomberg ETF analyst Eric Balchunas echoed this sentiment, stating that early adopters are the main contributors to spot Bitcoin ETF allocations. He believes that as more advisors solicit their clients, Bitcoin ETF inflows will continue to increase.
Other commentators have highlighted the significant amount of Bitcoin still held by GBTC, approximately 370,000 BTC. They argue that this suggests a positive long-term outlook for ETF flows. Despite the recent outflows, it is unlikely that GBTC can sustain this pace of selling for an extended period.
Grayscale Bitcoin Trust was converted into a spot ETF on January 11, along with nine other spot Bitcoin ETFs from issuers like BlackRock and Fidelity. This move has attracted attention and speculation from investors and market analysts.