{"id":16330,"date":"2024-03-26T17:20:35","date_gmt":"2024-03-26T17:20:35","guid":{"rendered":"https:\/\/coinengineer.io\/blog\/?p=16330"},"modified":"2024-03-26T17:03:05","modified_gmt":"2024-03-26T17:03:05","slug":"bitcoin-investment-products-suffer-outflows-gbtc-woes-offset-new-etf-inflows","status":"publish","type":"post","link":"https:\/\/coinengineer.net\/blog\/bitcoin-investment-products-suffer-outflows-gbtc-woes-offset-new-etf-inflows\/","title":{"rendered":"Bitcoin Investment Products Suffer Outflows, GBTC Woes Offset New ETF Inflows"},"content":{"rendered":"

Digital asset investment products witnessed a significant shift last week, experiencing outflows for the first time in eight weeks, according to data from CoinShares. The total outflows reached a staggering $942 million, marking a sharp reversal from the previous seven weeks that saw inflows of $12.3 billion.<\/p>\n

Grayscale Bitcoin Trust (GBTC) Drags Down Market<\/strong><\/p>\n

Grayscale Bitcoin Trust (GBTC), the incumbent player in the Bitcoin ETF<\/a> market, emerged as the primary culprit behind the outflows. Investors pulled a substantial $2 billion from GBTC, significantly outweighing the positive inflows of $1.1 billion observed in new US ETF issuers.<\/p>\n

Bloomberg’s cryptocurrency strategist, James Seyffart, attributes the net outflows primarily to recent bankruptcy proceedings. He suggests that selling activities by Gemini and Genesis, likely associated with the bankruptcies, were the major drivers behind the outflows from GBTC.<\/p>\n

Outflows Expected to Ease<\/strong><\/p>\n

Seyffart anticipates a potential slowdown in outflows moving forward. With the bankruptcy-related selling pressure likely to subside, a return to inflows could be on the horizon. Estimates suggest that Gemini and Genesis may have roughly $3.9 billion worth of GBTC remaining to offload.<\/p>\n

High Fees Continue to Plague GBTC<\/strong><\/p>\n

One of the longstanding criticisms of GBTC has been its high gas fees, which have deterred investors and contributed to the outflows. Grayscale CEO Michael Sonnenshein has acknowledged this concern and hinted at upcoming efforts to reduce fees.<\/p>\n

Bloomberg ETF strategist Eric Balchunas expressed skepticism regarding the possibility of significant inflows returning to GBTC in the future. He suggests that smaller, newer Bitcoin-based ETFs with lower fees (under 30 basis points) might be more attractive to investors.<\/p>\n

Balchunas raises a critical point regarding the potential presence of “mirage assets” or “tax hostages” within GBTC’s AUM (Assets Under Management). This implies that a significant portion of GBTC’s holdings might not represent readily tradable positions for many investors.<\/p>\n

Altcoins See Silver Lining<\/strong><\/p>\n

While Bitcoin dominated the outflows, with a staggering 96% share ($904 million), altcoins offered a glimmer of hope. The report by CoinShares highlights positive inflows for several altcoins, including Polkadot ($5 million), Avalanche ($2.9 million), and Litecoin ($2 million). Overall, the altcoin space collectively recorded net inflows of $16 million, providing some balance to the week’s overall trend.<\/p>\n

\n

You can freely share your thoughts and comments about the topic in the comment section. Additionally, don\u2019t forget to follow us on our\u00a0Telegram<\/strong>\u00a0 ,<\/a>YouTube<\/strong><\/a>\u00a0and\u00a0Twitter<\/strong><\/a>\u00a0channels for the latest news and updates.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Digital asset investment products witnessed a significant shift last week, experiencing outflows for the first time in eight weeks, according to data from CoinShares. The total outflows reached a staggering $942 million, marking a sharp reversal from the previous seven weeks that saw inflows of $12.3 billion. Grayscale Bitcoin Trust (GBTC) Drags Down Market Grayscale<\/p>\n","protected":false},"author":1,"featured_media":16334,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[61,534,2093,3759],"class_list":["post-16330","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-bitcoin","tag-bitcoin-etf","tag-gbtc","tag-grayscale-bitcoin-trust"],"yoast_head":"\nBitcoin Investment Products Suffer Outflows, GBTC Woes Offset New ETF Inflows - Coin Engineer<\/title>\n<meta name=\"description\" content=\"Last week, digital asset investment products witnessed unprecedented weekly outflows, totaling $942 million.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coinengineer.net\/blog\/bitcoin-investment-products-suffer-outflows-gbtc-woes-offset-new-etf-inflows\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bitcoin Investment Products Suffer Outflows, GBTC Woes Offset New ETF Inflows - 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