By
Godfrey Benjamin
April 29th, 2024
Grayscale CEO is confident of more investors adopting Bitcoin ETF especially after the US SEC approves Grayscale Bitcoin Mini Trust with lower sponsor fees.
After more than two months of heavy bleeding, the Grayscale Bitcoin Trust ETF (GBTC) recorded its lowest cash outflow on Thursday. According to the spot ETF market data, Grayscale Investments’ GBTC recorded a total cash outflow of about $18 million. As a result, Grayscale’s GBTC has seen a total outflow of about 300,700 Bitcoins, worth about $15.96 billion, since the approval of spot BTC ETFs by the US SEC earlier this year.
Meanwhile, according to SoSoValue, the total Bitcoin spot ETF net inflow hit the mark of $123 million yesterday.
As of Thursday, Grayscale’s GBTC held around 312,878 Bitcoins, worth about $21.8 billion. With 354,890,100 outstanding shares, Grayscale’s GBTC traded around $62.39 as of Wednesday.
The Grayscale’s GBTC is undeniably facing intense competition from other spot BTC ETF issuers led by iShares Bitcoin Trust (NASDAQ: IBIT) which is backed by BlackRock Inc (NYSE: BLK). Furthermore, the IBIT and the Fidelity Wise Origin Bitcoin Fund (BATS: FBTC) have a total of 411,797 Bitcoins, without a single day of net outflow.
Bitcoin ETF Flow – 10 April 2024
GBTC Outflow $18m
— BitMEX Research (@BitMEXResearch) April 10, 2024
Grayscale’s Plan to Negate Cash Outflows
Grayscale and its team have been working to prevent further bleeding amid the mainstream adoption of Bitcoin and digital assets by institutional investors. As Coinspeaker previously reported, Grayscale is pushing the United States Securities and Exchange Commission (SEC) to approve its Grayscale Bitcoin Mini Trust, which has a lower sponsor fee.
In addition to the GBTC liquidation from the crypto-bankrupt firms, investors have been fleeing to alternative spot BTC ETF issuers with lower sponsor fees. Currently, the GBTC has a sponsor fee of about 1.5 percent compared to the average of about 0.25 percent.
Meanwhile, Grayscale CEO Michael Sonnenshein expects the GBTC cash outflow to significantly decline in the near term as the overall outflow reaches an equilibrium.
“We do believe that the fund has started to reach a little bit of an equilibrium where some of those anticipated outflows, whether it was some of the bankruptcy selling, some investors perhaps undertaking switch trades, (are) largely behind us. Over time, as markets mature, we anticipate that GBTC’s fees will come down,” Sonnenshein said.
Over time, Sonnenshein is confident that Grayscale will attract more investors to its spot Bitcoin ETF products and others.
Impact on BTC Price Action
Bitcoin price has been attempting to rally above $74k in the past few weeks to no avail. The flagship coin has gained about 7.7 percent in the past seven days to trade around $70,894 on Thursday during the early London session.
$BTC Bullish Pennant formation on the Daily timeframe Chart is still in play..!!
A Successful Breakout could Send Bitcoin to a New all-time High. (85k) 📈#Crypto #Bitcoin #BTC pic.twitter.com/37ZpiwvCrr
— Captain Faibik (@CryptoFaibik) April 11, 2024
According to a Bitcoin price analysis by a popular crypto analyst alias Captain Faibik, BTC price against the US dollar is on the cusp of a bullish breakout towards $85k from a daily pennant formation.