Each day, Coinrule will run through the state of the digital assets market for Blockbeat, your home for news, analysis, opinion and commentary on blockchain and digital assets.
The past two weeks of US Bitcoin spot ETF inflows were less than disappointing. The bullish camp suspected that after the halving, the ETFs would see a surge of inflows. The bears believed it would be a sell the news event, with the halving’s bullish effects already exaggeratedly priced. So far, it seems the bears have been correct, but with the latest ETF inflows, could the correction be complete and the market sentiment shifting?
From the halving on 20 April to last Thursday, over $1 billion escaped the coffers of the ETFs, according to data from Farside Investors. This included last Wednesday’s figure of $563.7 million in outflows and became the new daily outflow record. However, on Friday the outflow clouds parted, with $378 million of net inflows. Friday became the first day on record that all the ETFs experienced no outflows. This week also started off strong with $217 million of net inflows on Monday, and again no outflows.
However, it seems some ETF investors are also not immune to fear and greed, with record outflows happening on Wednesday and around the $56,500 local bottom. The highest inflow day, so far, was 12 March with over $1 billion of inflows. Bitcoin closed that day around $71,500, and is now only 3% from its all-time high. Some serious fear of missing out (FOMO) must’ve been felt on that day. Friday also echoed this, with Bitcoin’s daily rise of over 6% being accompanied by strong ETF flows. Friday’s poor job figures from the Federal Reserve do provide some reasoning behind the market’s rebound, with increasing likelihood of a pivot to lower rates to ensure unemployment doesn’t get out of hand.
Interestingly, for the first time since converting to a spot ETF, Grayscale had its first inflows of $63 million last Friday. Monday also saw inflows of $3.9 million. The primary catalyst for GBTC losing nearly $17.5 billion worth of Bitcoin is its high fee. GBTC currently charges 1.5% on their $18.5 billion of assets or 292,000 Bitcoin. The majority of their competitors charge below 0.25% of fees, or none at all. Grayscale has previously announced they are creating another ETF, named BTC, with 0.15% fees to remain competitive. If approved, GBTC holders will have 10% of their funds reallocated to BTC with it not causing a taxable event. Preventing taxable events is the primary reason why Grayscale still retains 292,000 Bitcoin, even with 1.5% fees.
With BlackRock’s IBIT holding 274,000 Bitcoin, Grayscale still leads the pack, for now.