Bitcoin Rollercoaster: Grayscale’s ETF Exodus Jolts Crypto Markets

Bitcoin experienced a dip of over 3% from its 24-hour high as investors in Grayscale’s spot Bitcoin exchange-traded fund (ETF) shed $598.9 million from the fund on Feb. 29 — marking its second-largest net outflow on record.

Reaching a peak of $63,585 early on Feb. 29, Bitcoin has since slipped around 3.3% to hover just below $61,500, as per Cointelegraph Markets Pro data.

This downturn coincides with the Grayscale Bitcoin Trust (GBTC) — the recently converted ETF managed by asset managers — witnessing daily net outflows reaching $600 million on Feb. 29, according to preliminary Farside Investor data. This figure trails only the record $640.5 million net outflow observed on Jan. 22.

“That’s a lot,” remarked Bloomberg senior ETF analyst Eric Balchunas in a Feb. 29 X post, addressing the day’s outflows.

The near-record outflows come shortly after GBTC reported a historic low daily net outflow of $22.4 million on Feb. 26. “Two steps forward, one step back,” Balchunas added.

On Wednesday, Feb. 28, the ten United States spot Bitcoin ETFs witnessed a collective record-high net inflow of $673.4 million as Bitcoin reached an over two-year high of $64,000.

However, the latest GBTC outflows could offset the day’s inflows. While complete inflow data across the other nine ETFs is currently unavailable, Farside’s Feb. 29 data shows Fidelity’s Bitcoin ETF — one of the top three largest funds by assets — generating a mere $44.8 million net inflows, marking its fourth-lowest day of inflows.

In a recent note to investors, JPMorgan analysts cautioned that the price of Bitcoin might decline after the “halving euphoria” fades away.

Bitcoin’s upcoming halving event in April, anticipated by many to boost its price, could potentially have the opposite effect, pushing it towards $42,000 instead, the analysts highlighted in a Feb. 29 note reported by Bloomberg.

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Maria Irene
Maria Irenehttp://ledgerlife.io/
Maria Irene is a multi-faceted journalist with a focus on various domains including Cryptocurrency, NFTs, Real Estate, Energy, and Macroeconomics. With over a year of experience, she has produced an array of video content, news stories, and in-depth analyses. Her journalistic endeavours also involve a detailed exploration of the Australia-India partnership, pinpointing avenues for mutual collaboration. In addition to her work in journalism, Maria crafts easily digestible financial content for a specialised platform, demystifying complex economic theories for the layperson. She holds a strong belief that journalism should go beyond mere reporting; it should instigate meaningful discussions and effect change by spotlighting vital global issues. Committed to enriching public discourse, Maria aims to keep her audience not just well-informed, but also actively engaged across various platforms, encouraging them to partake in crucial global conversations.

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