Capital outflows from the Grayscale bitcoin ETF (GBTC) remain the dominant market story. The number of departures is still enormous. Yesterday, Tuesday, $515 million flew out of GBTC, for a total of $3.96 billion. Meanwhile, the “newborn nine” recorded flows of $407 million. Therefore, the 8th closed with a net outflow of $106 among the 10 spot bitcoin ETFs.
The detailed breakdown of BitMEX Research (after the 8th) reveals Blackrock continues to lead the charge with a positive inflow of $1,849.5 million, closely followed by Fidelity with $1,599.1 million and Bitwise with $518.3 million.
The market's fluctuating dynamics are further highlighted by the four days of net inflows and four days of net outflows observed during this period. The total inflow for all 10 ETFs (with grayscale) was 21,362.5 btc, while GBTC alone experienced a massive outflow of 98,296 btc.
Providing a possible glimmer of optimism, BitMEX Research aggregate“While today's GBTC outflow of $515 million is down from yesterday's $640 million, and the discount to NAV has also narrowed significantly, these could be the first signs of pressure easing. on GBTC”.
When will Grayscale bitcoin outflows end?
The good news in recent days was that the market absorbed the sale of 22 million GBTC shares valued at close to $1 billion by bankrupt crypto exchange FTX. However, despite this sell-off, GBTC outflows continued for the next two days.
Bloomberg analyst Eric Balchunas, in an attempt to gauge market expectations, conducted a survey that indicated mixed opinions on the future scale of capital outflows from GBTC. He asked: “GBTC has purged 13% of its outstanding shares. How high do you think that number will get before the mass exodus stops?
The survey, with 9,288 votes (at the time of this edition), showed the following results: 21.5% voted for less than 20%, 48.7% for 35-50%, 16.4% for 50- 80% and 13.4% for more than 80%. Balchunas commented: “FWIW James Seyffart and I are both in the 25% range, but this is a very uncertain scenario with many unknowns.”
GBTC has bled 13% of its outstanding shares. How high do you think that number will go before the mass exodus stops?
— Eric Balchunas (@EricBalchunas) January 23, 2024
In addition to this, Seyffart stated: “My figure is above 20% and below 35% for the GBTC asset exodus.” Surprisingly, there are only 42 business days left until GBTC reaches 0 btc if outflows continue at the same pace.
There are only 42 business days left until $GBTC reaches 0 btc hahaha pic.twitter.com/5Kwako4u9A
— NLNico (@btcNLNico) January 24, 2024
The cryptanalyst Fabián D. he pointed a notable trend, emphasizing that “today's trading volume for GBTC was the lowest since its launch, totaling around $760 million. This downward trend, if it continues, may indicate a slowdown in capital outflows, which could push the market valuation back above the $40,000 mark as investors recognize the slowdown in the exchange rate. ”.
Fred Krueger provided an analytical perspective on capital outflows, highlighting its strategic implication: “The capital being withdrawn from GBTC consists primarily of weak short-term holders, including the equity of FTX and presumably some of DCG.”
He added that this transition is changing the composition of the market towards the “newborn nine”, characterized by its “ultra-rigid asset allocation”, adding that “this change is likely to strengthen the fundamentals of the market, paving the way for a future more solid and stable”. .”
At the time of publication, btc was trading at $40,066, putting it below the key resistance zone at $40,200 to regain the previous trading range.
Featured image created with DALL·E, chart from TradingView.com
