On March 22, Bitcoin faced a downturn of over 5% as spot ETFs registered negative figures for the fourth consecutive day, largely attributed to exits from Grayscale GBTC.
SoSo Value reported that 10 spot Bitcoin (BTC) ETFs collectively saw a $93.8 million single-day outflow during trading on March 21. Grayscale’s GBTC constituted the majority of BTC ETF share liquidation, amounting to $358 million.
Bloomberg’s James Seyffart confirmed that Grayscale’s BTC ETF has shed nearly half of its shares to sell orders following the approval of spot BTC ETFs on January 11. Seyffart concurred with analyst Eric Balchunas that some of GBTC’s liquidation may be linked to Gemini and Genesis. Additionally, crypto.news reported in January that FTX, a bankrupt crypto exchange, liquidated $2 billion in Grayscale shares.
Outflows from GBTC overshadowed inflows into eight other products. BlackRock’s BTC ETF witnessed demand exceeding $223 million, followed by a $12 million injection into the fund from Bitwise. Data indicated that WisdomTree failed to attract inflows for at least the second time.
Bitcoin experienced an 8% retracement in the past week after dropping below $63,000, as per CoinMarketCap. BTC has declined by 14% from its all-time high of $73,750 set on March 14. The cryptocurrency traded around $62,900, approximately a month away from its quadrennial halving event.
Evgeny Filichkin, an investment advisor at neobank Keytom, echoed the prevailing sentiment that the halving, coupled with demand for spot BTC ETFs, will catalyze a supply shock and potentially trigger a parabolic run.
“Following the halving event, the supply of new BTCs will decrease, causing market dynamics to intensify. With increasing demand and limited availability, the heightened scarcity will amplify Bitcoin’s appeal, driving further investment interest,” said Evgeny Filichkin, Keytom investment advisor.
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