GBTC Outflows at $359M on March 21, Analyst Highlights Possible Reasons

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GBTC Bleeds $359M on March 21, Analysts Weigh In
  • GBTC saw outflows worth $359 million on March 21, as per BitMEX Research. 
  • ETF analyst Eric Balchunas believes that the “worst is probably close to being over.”
  • The outflows possibly stem from the Genesis/Gemini dispute according to the analysts.

The Grayscale spot Bitcoin exchange-traded fund (ETF), GBTC, witnessed outflows worth $359 million on March 21, according to the data from BitMEX Research.

Commenting on the event, Bloomberg ETF analyst Eric Balchunas stated that he thought that the worst for the Bitcoin ETF market was over, but the outflow data suggests otherwise. The analyst questioned which investors are now leaving the space after most of the outflows occurred in the past 2 months.

“The more I think about it the more likely the uptick in flows is related to the bankruptcies bc of the size and consistency. The flows in Feb showed what retail outflows look like, smaller and random patterns,” pointed out Balchunas.

The analyst stated that the “worst is probably close to being over” and once the outflows end, the spot ETF market will be left with only retail investors and flows should be more like the situation in February. 

James Seyffart, another Bloomberg analyst, stated that it is possible that the outflows could stem from the Genesis and Gemini conflict, where the former is selling close to $4 billion worth of GBTC shares. 

However, according to crypto enthusiasts, a large portion of the outflows from the Grayscale Bitcoin Trust (GBTC) “must be turning around and buying BTC with that cash,” which has made the market neutral. 

Additionally, Seyffart also pointed out that GBTC has lost 42.3% of its shares since converting to an ETF. As a result, the firm is set to introduce a novel ‘mini’ spot Bitcoin ETF to reduce outflows due to high management fees.

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