Jannat Ara

Record Low Outflows for GBTC ETF Coincide with Bitcoin’s Price Rebound and Anticipation of Halving

Amidst Bitcoin’s resurgence in the wake of United States inflation data and anticipation surrounding the upcoming halving event, the Grayscale Bitcoin Trust (GBTC) has witnessed a remarkable downturn in outflows, marking a record low nearly 90% lower than the previous day.

On April 10, GBTC recorded outflows of only $17.5 million, a stark contrast to the $154.9 million outflows seen on April 9, according to Farside data.

The surge in Bitcoin’s price, with a 2.08% increase over 24 hours, reaching $70,542, followed the release of US inflation figures, which injected volatility into the market. This rebound came after a temporary dip to local lows of $67,482 post the March US Consumer Price Index report, which suggested a higher-than-expected 3.5% year-on-year increase, raising concerns about potential delays in Federal Reserve interest rate cuts.

Observers within the crypto industry are expressing optimism about the slowdown in GBTC outflows, totaling $16 billion since transitioning to a spot Bitcoin ETF in January. Thomas Fahrer, CEO of Apollo, queried whether “GBTC selling [is] over?” noting the substantial drop in outflows on April 10, equivalent to about 250 Bitcoin, a decrease of nearly 95% from earlier in the week.

Other Bitcoin ETFs, including BlackRock IBIT, Fidelity FBTC, ARK’s ARKB, and Bitwise BITB, also saw positive inflows on April 10, according to Farside data. Fidelity FBTC led with an inflow of $76.3 million, its largest since April 5, contributing to a collective net inflow into Bitcoin ETFs now standing at $12,494.5 billion.

The impending Bitcoin halving, expected around April 20, is a significant focus for the market. This event will cut the Bitcoin block issuance rate from 6.25 coins per block to 3.125, historically leading to price surges due to reduced supply growth.

With increasing enthusiasm around spot Bitcoin ETFs, the market anticipates heightened demand, potentially fueling the ongoing rally. Fred Thiel, CEO of Marathon Digital, suggested that recent spot Bitcoin ETF approvals have injected substantial capital into the market, accelerating appreciation typically expected post-Bitcoin halvings.

Experts indicate a bullish market driven mainly by growing demand rather than the halving’s supply cut, with Andras Kristof, CEO of Galaxis, highlighting the unprecedented combination of supply and demand shocks. Kristof suggested that if demand for the new ETFs remains high, coupled with reducing supply, it could lead to a significant spike in Bitcoin price and volatility.

As Bitcoin’s price has more than doubled in the past year, experts predict institutional investors will increasingly join the fray, driven by the fear of missing out amidst the halving effect and the allure of ETFs.

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