Grayscale’s Bitcoin (BTC) exchange-traded fund (ETF) experienced significant outflows on March 21, with nearly $359 million leaving the fund. However, experts believe that this trend may soon come to an end.
The Grayscale Bitcoin Trust (GBTC) saw outflows of $358.8 million on March 21, following a week of massive outflows. On March 18, the fund recorded its largest day of outflows, with $642 million leaving the fund, according to Farside Investors data.
Since Monday, GBTC outflows have decreased. This week, a total of $1.8 billion has been withdrawn from GBTC, marking the fourth consecutive day of net outflows across all 10 Bitcoin ETFs.
Senior Bloomberg ETF analyst Eric Balchunas speculated that the majority of Grayscale’s outflows are coming from bankruptcies of crypto firms due to their size and consistency. He believes that once these outflows from firms like Gemini and Genesis subside, only retail investors will remain, resulting in smaller outflows similar to those seen in February.
As of March 21, Grayscale’s Bitcoin Trust reported $23.2 billion in assets under management. Since its conversion to an ETF on Jan. 11, GBTC has lost $13.6 billion.
Independent researcher ErgoBTC suggested that around $1.1 billion of GBTC outflows in recent weeks may have come from bankrupt crypto lender Genesis. ErgoBTC noted that the timing and volume of the funds flowing out of GBTC and into Genesis aligns well.
Crypto market commentator WhalePanda shared a similar sentiment, referring to a statement from Genesis on March 19. The firm announced that it would be returning assets to creditors by selling GBTC shares for Bitcoin.
In February, Genesis received court approval to liquidate its $1.3 billion worth of GBTC shares to repay its creditors. Additionally, bankrupt exchange FTX sold 22 million GBTC shares, valued at nearly $1 billion, to liquidate its holdings.
According to Trezor CEO, Bitcoin ETFs make Coinbase an attractive target for hackers and governments.