Grayscale Bleeding Slows

Grayscale's outflows are slowing, suggesting that sentiment - and the market - may be reaching an inflection point.

Is Grayscale a spent force?

The wave of money pouring out of GBTC may finally be coming to an end, if the latest figures are anything to go by.

While every day is still seeing large sells of BTC by Grayscale, as holders take profits and exit for lower fees, the numbers are dropping significantly and no longer threaten to overwhelm the inflows into the other nine ETFs.

A Turning Tide

Over the last two weeks, Grayscale has regularly sold over 10,000 BTC per day as GBTC holders sold their ETF shares. In total, GBTC has lost over 120,000 BTC since the ETFs launched on 11 January. They now hold under half a million coins.

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Last week, those outflows eclipsed any inflows, and the total number of BTC held in ETFs drifted downwards. That picture now seems to be changing, with Friday registering the first net positive day in a week.

Yesterday appears to have confirmed that trend, as trading volumes and outflows for GBTC dropped.

Bitcoin's Time To Shine

Grayscale's outflows aren't done, but they have now slowed to a point where they do not represent a source of net selling (i.e. releasing supply onto the market).

Early indications from BitMEX's research group is that yesterday was a strong day, with both BlackRock and Fidelity's inflows more than equaling GBTC outflows. The ETFs saw a net inflow of over 5,900 BTC as a result.

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This shift in flow patterns has coincided with a recovery in bitcoin's price, suggesting that the narrative may also be changing.

The market was due a reset after the ETFs went live, in a classic "sell the news" move. Traders and influencers who expected an instant $100k "god candle" were disappointed, and the mood on Crypto Twitter quickly turned. The widespread sentiment was that the launch had been a failure, though behind the scenes, it was clear that it was anything but.

Now, we truly get to see how these ETFs will impact demand. It's still very early days. As Warren Buffett has said, the market is a mechanism for transferring value from the impatient to the patient. Patient investors have just scooped up tens of thousands of BTC from impatient weak-handed traders.

Well played, frens.


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