GBTC Outflows Exceed $358M, but Signs Point to Potential End

Grayscale's Bitcoin (BTC) exchange-traded fund (ETF) witnessed significant outflows totaling nearly $359 million on March 21. However, analysts are optimistic that the ongoing exodus led by Grayscale could be nearing its conclusion.

The latest outflow of $358.8 million on March 21 follows a week of substantial withdrawals, with a record-breaking $642 million exiting the fund on March 18, according to data from Farside Investors. However, GBTC outflows have shown signs of tapering off since then.

Senior Bloomberg ETF analyst Eric Balchunas speculated in a recent post on X that a significant portion of Grayscale's outflows might soon come to a halt, attributing much of the exodus to bankruptcies among crypto firms. Balchunas suggested that any outflows from Gemini or Genesis are likely being used to purchase BTC, thus supporting the market.

As of March 21, Grayscale reported that its Bitcoin Trust held $23.2 billion in assets under management. Since its conversion to an ETF on Jan. 11, GBTC has shed a total of $13.6 billion.

In line with Balchunas' analysis, independent researcher ErgoBTC estimated that around $1.1 billion of recent GBTC outflows may be linked to bankruptcies, particularly that of crypto lender Genesis. ErgoBTC noted a correlation between the timing and volume of outflows from GBTC and inflows into Genesis.

Similarly, pseudonymous crypto market commentator Whale Panda pointed to a statement from Genesis on March 19, indicating that the firm would be returning assets to creditors by selling GBTC shares for Bitcoin. Genesis had previously received court approval to liquidate its $1.3 billion worth of GBTC shares to repay creditors.

These developments suggest that the bulk of GBTC outflows may be nearing an end, with potential implications for market dynamics and investor sentiment moving forward.