U.S. Bitcoin ETFs See Inflows After 5-Day Outflow Streak, While Grayscale’s GBTC Nears 300,000 Bitcoin Mark
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During the past week, U.S. spot Bitcoin exchange-traded funds (ETFs) experienced consistent net outflows, indicating that investors were selling more Bitcoins through these funds than they were buying.
This trend persisted for five consecutive days, reflecting a cautious approach among ETF investors. However, on Friday, there was a slight reversal with a modest inflow of around 900 Bitcoins, equivalent to about $59.7 million.
This shift suggests a possible resurgence of interest in Bitcoin ETFs, even if only on a small scale, after a week of predominantly bearish sentiment.
At the same time, Grayscale’s Bitcoin Trust (GBTC) is close to holding fewer than 300,000 bitcoins, with a current holding of 304,970.43 bitcoins as of Monday.
Despite a challenging week for U.S. spot Bitcoin ETFs, which incurred losses totaling $319.1 million, there was a positive shift on Friday with some capital returning to these funds.
Therefore, the continuous outflow of funds from U.S. spot bitcoin ETFs and Grayscale’s declining bitcoin reserves likely contributed to bearish sentiment in the crypto market, resulting in overall losses.
Bitcoin Halving Sparks Increased ETF Activity While GBTC Sees Decline in Bitcoin Holdings
Around the time of the Bitcoin halving on April 19, trading activity for spot Bitcoin exchange-traded funds (ETFs) soared to about $2.35 billion, with $59.7 million flowing into these funds.
In contrast, Grayscale’s Bitcoin Trust (GBTC) saw its usual trend of capital outflow on Friday. Just before the market opened on April 19, GBTC held 306,399.09 bitcoins, but that number has since fallen to 304,970.43 bitcoins.
This indicates that GBTC now holds 1,428.66 fewer bitcoins compared to Friday morning. The contrasting trends between spot Bitcoin ETFs and GBTC highlight differing investor behavior around the Bitcoin halving event.
Consequently, the surge in trading activity for spot bitcoin ETFs and outflow from Grayscale’s Bitcoin Trust (GBTC) likely added volatility to the market, contributing to fluctuations and potential downward pressure on bitcoin’s price.
BlackRock’s IBIT Gains on GBTC as Major Bitcoin Funds Hold Significant Market Share
Blackrock’s IBIT increased its bitcoin holdings from 273,140.85 to 273,596.44 by April 22, narrowing the gap with Grayscale’s Bitcoin Trust (GBTC) to just 31,373.99 bitcoins. At the same time, GBTC’s reserves decreased.
Combined, IBIT and GBTC hold a total of 578,566.87 bitcoins, valued at $38.46 billion, representing 2.93% of all bitcoins in circulation.
Along with the top three other spot bitcoin funds, excluding GBTC and IBIT, which hold 229,300.57 bitcoins, these major bitcoin funds exert considerable influence on the cryptocurrency market.
This concentration of Bitcoin holdings among a few large funds can impact market dynamics and price trends.
Thus, the increasing holdings of Blackrock’s IBIT and the decline in GBTC’s reserves, along with other major funds, can contribute to market volatility and potentially influence Bitcoin’s price movements.
Major Bitcoin Funds Hold 4.09% of Circulating Supply, Indicating Market Influence
It is worth mentioning that Fidelity’s FBTC, Ark Invest’s ARKB, and Bitwise’s BITB collectively hold a significant portion of the circulating Bitcoin supply, with FBTC leading with 152,465.48 bitcoins.
Together, these three funds own 1.16% of the total BTC in circulation. When combined with other funds like GBTC and IBIT, they control 4.09% of the Bitcoin supply.
Despite recent outflows, a surge in inflows on Friday suggests a potential market recovery, impacting overall confidence. Monitoring these funds’ strategic moves is crucial as they navigate the volatile BTC market, holding a substantial fraction of available bitcoins.
Hence, the substantial bitcoin holdings of major funds like FBTC, ARKB, and BITB, along with a surge in inflows, can impact BTC’s price by influencing market trends, sentiment, and liquidity dynamics.
