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After facing a four-month period of outflows exceeding inflows, Grayscale Bitcoin Trust (GBTC) has finally shown signs of a turnaround. This move could signal a positive shift in the cryptocurrency market, as GBTC recorded a net inflow of $63 million, breaking the negative trend that began after its launch as an ETF in January 2024. This development comes after the trust experienced a significant outflow of $17.5 billion since its inception.
The positive news for GBTC is not an isolated incident. Other Bitcoin-focused funds have also witnessed a surge in investments. Notably, Franklin Templeton’s EZBC ETF reached a record high with $60.9 million in inflows, while Fidelity’s FBTC led the pack with a remarkable $102.6 million. Bitwise’s BITB and Invesco Galaxy’s BTCO also saw significant inflows of $33.5 million and $33.2 million respectively.
This renewed interest in Bitcoin funds has sparked discussions about its potential impact on the cryptocurrency’s price. Experts believe that with Grayscale’s GBTC attracting fresh investments, there could be a decrease in overall selling pressure. This, in turn, could lead to a rise in demand for Bitcoin, potentially driving its price upwards.
Prominent crypto investor DivXman, known for his online pseudonym, has weighed in on the recent developments. He pointed out that GBTC was the primary source of sell pressure across all spot Bitcoin ETFs since they went live in January 2024. DivXman further elaborated, stating:
“That effectively means a significant decrease in sell pressure and additional increase in demand while ETFs collectively are buying more BTC than miners can create.”
Grayscale ETF Inflows Signal Bitcoin Price Optimism
Another crypto trader, Jelle, expressed optimism about Bitcoin’s future price. Jelle predicted $60 million in inflows for Grayscale’s ETF. The Bitcoin halving event will end soon, and a 6-figure Bitcoin price will follow shortly.
Market doing crazy shit while I’m away. 60 million dollars worth of inflows for Grayscale’s ETF.
The halving chop will come to an end, and 6-figure #Bitcoin will follow shortly after.
Hold on tight & enjoy the ride. https://t.co/QrSgTwpX5k
— Jelle (@CryptoJelleNL) May 4, 2024
While the recent inflows are positive, it’s important to acknowledge the factors that contributed to the previous outflows from Grayscale’s GBTC. A key factor has been the fund’s relatively high fees compared to its competitors. GBTC charges a 1.5% fee, whereas other Bitcoin ETFs have fees below 1%. Franklin Templeton’s EZBC stands out with the lowest fee (0.19%) among all currently available ETFs.
The recent inflow of investments into Bitcoin funds like GBTC represents a potential turning point for the cryptocurrency’s price. With GBTC breaking its outflow streak and other funds experiencing record-breaking inflows, the market sentiment surrounding Bitcoin appears to be shifting. While it’s still too early to definitively predict a surge in Bitcoin’s price, these developments offer a glimmer of hope for investors and enthusiasts.
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