On Wednesdays, there was a change in Bitcoin ETF investments, moving from outflows to inflows, making it a net positive week so far, exceeding the previous outflows experienced on Mondays.

The recent improvement in this situation is due to Grayscale’s GBTC seeing a decrease in investors withdrawing their funds, with just $75.1 million leaving on Wednesday.

Inflows Surge to $113 Million, GBTC Outflows Ease

According to Farside’s data as of Wednesday, a total of $113.5 million has been invested. Fidelity’s FBTC accounted for the largest share with $116.7 million, followed by Blackrock’s IBIT with $42 million and Bitwise’s BTIB with $23 million.)

The outflow of funds from Grayscale’s GBTC was relatively small at $75.1 million, which is the lowest since February 26. In comparison, other ETFs experienced only modest inflows, each adding less than $4 million, resulting in a total net inflow of approximately $12.2 billion.

After a rough beginning to the week with net redemptions of $85.7 million, ETF investments experienced a reversal on later days. Notably, Grayscale’s GBTC saw substantial outflows amounting to $302.6 million on Monday.

Back then, James Seyffart, an ETF analyst at Bloomberg, expressed surprise, remarking, “To be honest, I had anticipated a slower pace,” “Yet it seems to be more robust than I initially assumed.”

On Tuesday and Wednesday, the negative trend for GBTC’s outflows was countered. The amount of money leaving the Grayscale Bitcoin Trust decreased to $81.9 million on Tuesday, followed by a reduction to $75.1 million on Wednesday.

Genesis’ GBTC Shares Sale Linked to Selling Pressure

A report from Coinbase indicated that the possible sale of over $2 billion worth of GBTC shares by Genesis Global Holdco LLC, amounting to approximately 35.9 million shares, could be responsible for the recent market pressure on GBTC during the previous month.

After obtaining approval from the U.S. Bankruptcy Court in the Southern District of New York on February 14, Genesis was allowed to sell its GBTC shares.

At present, the GBTC Bitcoin ETF by Grayscale imposes a 1.5% fee, while FBTC and IBIT charge only 0.25%. Eric Balchunas, an ETF analyst at Bloomberg, pointed out GBTC’s higher fee and mentioned that despite investors withdrawing their funds and voicing concerns, GBTC is unlikely to reduce its own fee, even though Grayscale’s CEO had previously announced they would do so.

Over the past decade, equity mutual funds have experienced a net withdrawal of approximately $3.5 trillion, but their total assets have grown from $8 trillion to $14 trillion due to stocks increasing by around 280% during this period. This situation underscores the “bull market subsidy” effect – a phenomenon that likely explains why Grayscale Bitcoin Trust (GBTC) has shown no signs of reducing its fees despite ongoing outflows and complaints.
— Eric Balchunas (@EricBalchunas) April 3, 2024

In simpler terms, just like equity mutual funds experienced large withdrawals of investments during the last ten years but experienced growth as a result of escalating stock prices, GBTC is influenced by favorable market circumstances and might not feel compelled to decrease its fees.

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2024-04-04 16:09