Grayscale, a leader in crypto asset management, witnessed its largest daily outflow on March 18th, with more than $640 million departing from its spot Bitcoin ETF. This event marked a significant moment for the fund since it transitioned to a spot ETF on January 11th. Meanwhile, Farside Investors noted that Fidelity’s Bitcoin ETF, the second-largest of its kind, also experienced its lowest inflow day, totaling just $5.9 million. These fluctuations resulted in a combined net outflow of $154.3 million from spot Bitcoin ETFs on that day.
Bitcoin Price Trends and Market Speculations
The Bitcoin market has been struggling, with CoinGecko data revealing a trading price of $65,875, a 10.5% drop from its peak. Market experts have linked this downward pressure to several factors, including reduced inflows into Bitcoin ETFs, the potential impact of the upcoming Bitcoin halving event, and anticipations surrounding the US Federal Reserve’s FOMC meeting on March 20th. While some analysts project a cautious stance, others remain optimistic about the ETF sector’s potential.
Insights from Investment Experts
Grant Englebart of Carlson Group, during a Bloomberg TV interview, highlighted that a mere fraction of their advisors had invested in Bitcoin ETFs, with an average allocation of 3.5% of total funds. Bloomberg ETF analyst Eric Balchunas echoed similar sentiments, pointing out that meaningful allocations in Bitcoin ETFs were currently limited to a select group of early adopters, with the majority of advisors not yet recommending these funds to clients. Balchunas emphasized that current fund inflows were primarily driven by incoming traffic, not widespread advisor endorsement.
Despite recent outflows, some analysts like Allesandro Ottavani suggest that the vast Bitcoin holdings of Grayscale’s trust, which stands at approximately 370,000 Bitcoin, indicate a long-term positive trend for ETF flows. Ottavani underlined that Grayscale’s selling pace is unsustainable in the long run, hinting at a potential reversal of the current trend.
The shift of Grayscale’s Bitcoin Trust to a spot ETF followed the precedent set by other issuers, including BlackRock and Fidelity, who had their spot Bitcoin ETFs approved, signifying a growing trend in the crypto ETF space.