- The biggest Bitcoin (BTC) exchange-traded fund (ETF) by assets, Grayscale’s Bitcoin Trust (GBTC), has announced its first net inflow since its inception in January 2024.
This occurs after the fund had withdrawals totaling $1.6 billion prior to the Bitcoin halving.
GBTC reported a net inflow of $63 million on May 3, based on information provided by Farside Investors. Since the fund’s conversion to an ETF in January, when 11 new spot Bitcoin ETFs were introduced in the US, this represented the fund’s first positive net flow.
The continuous withdrawals from GBTC since its conversion to an ETF were caused by a number of variables. The fund’s 1.5% annual management cost, which is significantly higher than that of other Bitcoin ETFs that charge less than 1%, is one of the main causes.
Moreover, the withdrawals have also been fueled by the bankruptcy-related sales of Bitcoin by companies such as FTX and Genesis. About $1 billion worth of GBTC shares were sold by FTX, and roughly 36 million shares, worth $2.1 billion, were liquidated by Genesis in order to buy Bitcoin.
On that same May 3, there was a $378 million net inflow into the market overall. Notable results came from Fidelity’s Bitcoin ETF (FBTC), which led the day with $102.6 million in inflows, and Franklin Templeton’s Bitcoin ETF (EZBC), which saw its largest-ever inflow of $60.9 million.
The inflow has put an end to Grayscale’s Bitcoin Trust (GBTC)’s recent trend of net withdrawals. As of right now, GBTC has $18.1 billion in assets, while IBIT has $16.9 billion. In January, GBTC had nearly $26 billion in assets, whereas IBIT had none at all. While the influx is encouraging for GBTC, the pressure from IBIT’s explosive expansion is increasing.
Investor confidence has increased as a result of the change from outflows to inflows in GBTC and the larger Bitcoin ETF market. Some have speculated that this could be a sign that Bitcoin is about to hit new all-time highs. However, given the ongoing market and regulatory concerns, it is unclear if this momentum will last.
Ethereum ETF: Grayscale is still optimistic
Despite recent worries about the SEC’s degree of involvement with applicants and its ongoing investigation into the Ethereum Foundation, Grayscale says it is confident that the SEC will approve its spot Ethereum (ETH) exchange-traded funds (ETFs) by May.
Chief Legal Officer at Grayscale Craig Salm emphasized that the essential differences lie in the underlying asset—Bitcoin versus Ethereum—while pointing out that the approval processes for spot Bitcoin ETFs and spot Ethereum ETFs are similar.
Salm thinks that this consistency should simplify the SEC’s review procedure and add to Grayscale’s hope for a successful conclusion.
The predictions of Bloomberg ETF experts Eric Balchunas and James Seyffart are not in line with Grayscale’s. Both observers now only foresee a 25% chance of the spot Ethereum ETF being approved in May.
Balchunas speculated that the SEC might be purposefully avoiding involvement instead of just delaying it.
Coinbase, a cryptocurrency exchange, has also urged the SEC to accept Grayscale’s planned Ethereum spot ETF. Coinbase contended in a letter to the SEC that the reasoning behind the approval of spot Ethereum ETFs is just as good, if not stronger, than the reasoning behind the approval of spot Bitcoin ETFs.
By May 23, the SEC is anticipated to have decided on VanEck’s application; the status of the other applicants is anticipated to be disclosed at the same time. Organizations such as Grayscale, Fidelity, VanEck, and BlackRock are assiduously working to get their spot Ethereum ETFs approved.
Based on the similarities between the procedures for spot Bitcoin and spot Ethereum ETFs, Grayscale feels certain that the SEC will approve spot Ethereum ETFs.
The company believes that the SEC’s experience with Bitcoin may help Ethereum because the major concerns it addressed in the process of approving spot Bitcoin ETFs are also believed to apply to spot Ethereum ETFs.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
