Grayscale Bitcoin Trust (GBTC), the largest Bitcoin (BTC) exchange-traded fund (ETF) by assets, has reported its first net inflows since its inception in January 2024.
This comes after the fund experienced $1.6 billion in outflows ahead of the Bitcoin halving.
On May 3, GBTC recorded net inflows of $63 million, according to data from Farside Investors. This was the fund's first positive net flow since converting to an ETF in January, when 11 new spot Bitcoin ETFs were launched in the US.
Several factors have contributed to the consistent outflow of GBTC since it was converted into an ETF. One of the main reasons is that the fund has an annual management fee of 1.5%. This is significantly higher than other Bitcoin ETFs, which charge less than 1% in fees.
Furthermore, the sale of GBTC shares by bankrupt crypto companies such as FTX and Genesis also caused capital outflows. FTX sold about $1 billion worth of GBTC stock, and Genesis liquidated about 36 million shares worth about $2.1 billion to buy Bitcoin.
On the same day, May 3, there was a total net inflow of $378 million across the market. Notable performances included Franklin Templeton's Bitcoin ETF (EZBC), which had an all-time high in inflows of $60.9 million, and Fidelity's Bitcoin ETF (EZBC), which topped the day with $102.6 million in inflows. FBTC) is included.
This influx halted Grayscale's streak of net withdrawals from Bitcoin Trust (GBTC). Currently, GBTC has assets of $18.1 billion and IBIT has reached $16.9 billion. IBIT started in January with zero assets, while GBTC held more than $26 billion. While inflows are a positive sign for GBTC, IBIT's rapid growth is increasing competitive pressure.
The shift from outflows to inflows in GBTC and the broader Bitcoin ETF market is creating optimism among investors, and this could be an early indicator of Bitcoin reaching all-time highs. Some people suggest that. However, it remains to be seen whether this momentum will continue given continued regulatory and market uncertainty.
Ethereum ETF: Grayscale remains promising
Grayscale has confirmed that the U.S. Securities and Exchange Commission (SEC) has approved a Spot Ethereum (ETH) exchange-traded fund (ETF) despite recent concerns over the SEC's level of engagement with applicants and ongoing investigations into Ethereum. He said he was confident it would be approved by May. Foundation.
Grayscale Chief Legal Officer Craig Sahm pointed out the similarities between the approval processes for Spot Bitcoin ETF and Spot Ethereum ETF, stating that the core operations are essentially the same and the main differences are: He emphasized that the underlying assets are Bitcoin and Ethereum.
Salm said this consistency should make the SEC's review process simpler and contribute to Grayscale's optimism that it will get a positive outcome.
Grayscale's outlook contrasts with that of Bloomberg ETF analysts Eric Balchunas and James Seifert. Both observers lowered their expectations for Spot Ethereum ETF approval in May to just 25%.
Balciunas suggested that the SEC's apparent lack of involvement may be intentional rather than just a delay.
Cryptocurrency exchange Coinbase also encouraged the SEC to approve Grayscale's proposed Spot Ethereum ETF. In a letter to the SEC, Coinbase argued that the logic used to justify the approval of the Spot Bitcoin ETF applies equally, if not more strongly, to the case of the Spot Ethereum ETF. .
The SEC is expected to make a decision on VanEck's application by May 23, with the fate of the other applicants expected to be announced around the same time. Companies like BlackRock, VanEck, Fidelity, and Grayscale are all actively seeking approval for their Spot Ethereum ETFs.
Grayscale's confidence in the SEC's approval of the Spot Ethereum ETF is based on the similarities in the processes for the Spot Bitcoin and Spot Ethereum ETFs.
The firm believes that the key issues raised by the SEC during the approval process for the Spot Bitcoin ETF are largely the same for the Spot Ethereum ETF, and the regulator's experience with Bitcoin could pave the way for Ethereum. It suggests that there is.
