After massive outflows, Grayscale’s spot bitcoin ETF records its first positive flows

For the first time in its history, Grayscale’s spot bitcoin ETF recorded positive flows, to the tune of $63 million.

Is Grayscale’s spot bitcoin ETF, GBTC, getting its revenge? Previously shunned by investors, the fund recorded its first positive net flows on Friday May 3, to the tune of $63 million. A situation which ended 78 days of consecutive net outflows (in other words there was then more money withdrawn than money invested in the fund each day).

GBTC performed better than Blackrock, which saw $12.7 million in positive flows on the same day, but worse than Fidelity, which saw $102.6 million in net inflows. “GBTC recorded positive entries today (…). I had to double-check, but it’s true,” Eric Balchunas, analyst at Bloomberg ETF, said on X.

Although it is difficult to explain these data, they are part of a context of renewed investor interest in these financial products launched in mid-January. US spot bitcoin ETFs accumulated net inflows of $378.3 million on Friday ending 7 days of consecutive outflows, reports The Block. It will be interesting to observe Grayscale’s flows this week to see if this positive trend continues over time.

$17.5 billion in outflows

Grayscale’s fund converted to a spot bitcoin ETF in early January 2024. But from the start, Grayscale has charged high fees of 1.5% compared to around 0.25% by its competitors, scaring away investors. Result: since its launch, the fund has accumulated more than $17.5 billion in outflows. He now only holds 291,239 bitcoins, compared to 619,220 bitcoins in mid-January.

Grayscale, however, does not seem to have said its last word, with the group considering launching a “mini” bitcoin spot ETF, with fees of 0.15%, which would be the lowest on the market.

On January 10, the American stock market watchdog (the SEC) has authorized 11 spot bitcoin ETFs, including that of Blackrock and Fidelity. An ETF (or Exchange Traded Funds) is an index fund trading on a stock exchange which follows the evolution of a stock index (or one or more financial or physical assets, such as gold) by replicating the increase as well as the drop in the price of this index (or these assets).

The arrival of these new financial products has had an impact on the price of the queen of cryptocurrencies. Since the start of the year, the price of bitcoin has jumped 60%, including 53% over the last three months. After spot bitcoin ETFs were allowed on the market, investors are hoping that the SEC will approve spot ether ETFs later this year.