Investor interest in recently launched spot Bitcoin ETFs appears to be diminishing, with a net outflow of approximately $80 million recorded on Thursday. Bloomberg reports indicate that despite witnessing around $270 million in inflows on Wednesday, net outflows totaled about $153 million when accounting for withdrawals from Grayscale Investment’s Bitcoin ETF. This marks the fourth consecutive day of net withdrawals across the 10 Bitcoin ETFs. The primary contributor to these outflows has been the Grayscale Bitcoin Trust (GBTC), which transitioned into an ETF on January 11, experiencing withdrawals of around $4.8 billion since the conversion.
Background and Market Dynamics
The transformation of GBTC from a closed-end trust to an ETF format was approved by the U.S. Securities and Exchange Commission, enabling investors to exit a previously popular arbitrage opportunity. This shift triggered significant sell-offs, further intensified by the liquidation activities of the bankrupt FTX exchange’s estate. The highest daily outflow from GBTC was recorded at $641 million on January 22, gradually decreasing to $394 million by January 25. The overall value of Bitcoin has seen a 20% decline during this period, highlighting the impact of the format change on investor behavior.
This development underscores the evolving dynamics in the cryptocurrency market as investors navigate the new landscape shaped by regulatory approvals, product transformations, and changing market conditions.
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