Contents
Toggle
GBTC Profit-Taking Phase Comes to an End
Funds Continuously Flowing Out of GBTC
Since Grayscale’s Bitcoin Trust Fund (GBTC) successfully transitioned to a spot ETF, the downward pressure on Bitcoin caused by outflows from GBTC funds has not disappeared. According to statistics from BitMEX, nearly $400 million flowed out of GBTC again yesterday.
In the latest research report released by JPMorgan, it is also mentioned that profit-taking by GBTC investors (who bought during the discount period) is a major driving factor behind the current price correction. In addition, the bankrupt exchange FTX has also liquidated around $1 billion worth of GBTC holdings, adding extra selling pressure on the underlying digital assets of Bitcoin.
JPMorgan had previously estimated that the net outflows from GBTC would reach approximately $3 billion. The analyst team at JPMorgan wrote in the latest report:
It should be emphasized that although the profit-taking activities of investors are coming to an end, it does not mean that the outflow of funds from GBTC will ease. According to the bank’s estimates, due to the much lower management fees of many newly launched Bitcoin spot ETFs compared to GBTC, around $1.3 billion has already been transferred from GBTC to the new spot Bitcoin ETFs, equivalent to $3 billion in outflows per month.
The report highlights that if Grayscale does not reduce its management fees quickly enough, this trend of outflows may continue. Furthermore, if other Bitcoin spot ETFs reach sufficient scale and liquidity to compete with GBTC, the outflow of funds may accelerate further.