Grayscale Investments maintained stable revenue in the first quarter despite substantial outflows from the Grayscale Bitcoin Trust (GBTC), its converted spot bitcoin exchange-traded fund (ETF). The firm reported 6 million in revenue, little change from the previous quarter, as stated in a shareholder letter from Digital Currency Group (DCG), its parent company. The conversion of […]
Bitcoin News
Grayscale Battling Outflows And Lower-Cost ETFs, Q1 Revenue Stays Flat At $156M
Grayscale Investments, the issuer of one of the recently approved spot Bitcoin exchange-traded funds (ETFs) in the US, saw flat revenues in the first quarter of the year due to its decision to maintain fees on its flagship Grayscale Bitcoin Trust ETF (GBTC).
Grayscale Exceeds Expectations Despite Outflows
According to a shareholder letter from its parent company, Digital Currency Group (DCG), the operator of the Grayscale Bitcoin Trust recorded 6 million in revenue, showing little change from the previous quarter.
Since the GBTC trust’s conversion to an ETF in January, Grayscale has seen outflows of about .4 billion as investors appear to have shifted their assets to new, lower-cost funds offered by BlackRock and Fidelity, the leaders in the US ETF race in terms of inflows recorded since January.
While GBTC charges a 1.5% management fee, many of its competitors charge less than 0.3%, leading to outflows. In response, Grayscale announced plans in March to seek approval from the Securities and Exchange Commission (SEC) to spin off some of Grayscale’s assets into a new, lower-fee “Bitcoin Mini Trust.”
Despite the outflows, the Q1 revenue attributable to GBTC exceeded Grayscale’s expectations. The firm had previously anticipated outflows due to increased competition under the ETF wrapper. Grayscale previously charged a 2% sponsorship fee before the trust was converted.
The flat revenue was also attributed to higher average Bitcoin and Ethereum prices and a decrease in assets under management (AUM).
In contrast to Grayscale’s performance, all US spot Bitcoin ETFs have witnessed a total net inflow of over billion thus far. However, demand for these ETFs has recently declined amidst tightening financial conditions in the US, where the Federal Reserve (Fed) faces the challenge of addressing persistent inflation.
DCG Reports 11% Q1 Revenue Increase
Digital Currency Group, founded by Barry Silbert and the parent company of Grayscale, reported an 11% quarter-over-quarter increase in Q1 revenue to 9 million, primarily due to higher asset prices.
However, revenue growth lagged behind Bitcoin’s price appreciation, which rose more than 60% during the same period. In its letter, DCG attributed this disparity to lower GBTC sponsor fees, redemptions, and steady mining revenues at its Foundry subsidiary.
Foundry, DCG’s mining subsidiary, experienced a sequential revenue increase of 35%, propelled by staking and equipment sales revenue. Meanwhile, Luno, the company’s crypto exchange subsidiary, witnessed a 46% quarter-over-quarter sales boost, driven by a significant surge in trading volume.
At press time, Bitcoin is trading at ,100 and has recently encountered significant price volatility. These price swings have failed to establish a stable position above crucial price thresholds.
Featured image from Shutterstock, chart from TradingView.com
Bitcoin Suffers Massive Outflows Amid Crypto Market Uncertainty, Tops $284 Million
The recent unimpressive price action of Bitcoin is playing out in the minds of institutional investors, with recent data highlighting their bearish sentiment. This has led to a wave of massive outflows from Bitcoin investment products, which could negatively impact the flagship crypto.
Bitcoin Investment Products Record 4 Million Of Outflows
CoinShares revealed in a blog post that Bitcoin investment funds recorded an outflow of 4 million last week. Most of these outflows are said to have come from the US Spot Bitcoin ETFs, which saw outflows of 6 million last week. CoinShares noted that last week was the first time these funds recorded such a measurable amount of outflows.
Related Reading: Can Ethereum Reclaim ,000? Fragile Fundamentals Threaten To Send ETH Crashing
These US Spot Bitcoin ETFs indeed had a week to forget last week, as even BlackRock’s iShares Bitcoin Trust (IBIT) recorded its first day of outflows since launch, with almost million exiting the fund.
CoinShares suggested that the magnitude of outflows was likely due to Bitcoin dropping below ,000, which they estimate is the average purchase price of these ETFs since launch. Therefore, they claim that Bitcoin’s decline may have triggered automatic sell orders.
Before now, institutional investors had already shown mixed feelings towards these funds thanks to Bitcoin’s recent price action. As such, it makes sense that Bitcoin dropping below ,000 made them panic sell instead of holding their positions.
Despite this development, CoinShares noted that the Spot Bitcoin and Ethereum ETFs in Hong Kong which launched last week, were a bright spot, recording 7 million in inflows in the first week of trading. The launch of these funds could prove timely, with Bitcoin needing a catalyst to continue its upward trend.
Interestingly, CoinShares revealed that Bitcoin was the only crypto asset to record outflows. On its part, Ethereum broke its seven-week streak of recording outflows, with million flowing into Ethereum investment products. Other altcoins like Avalanche, Cardano, and Polkadot also saw inflows.
Spot Bitcoin ETFs Still Not In The Clear
With Grayscale’s GBTC recording its first day of net inflows last week, there was the feeling that such development could spark a turnaround in the outflows that the Spot Bitcoin ETFs have been recording. However, that hasn’t been the case. On May 7, these funds recorded a net outflow of .7 million.
Related Reading: Here’s How This Ethereum Whale Made Million From A Single Trade
GBTC was again the primary culprit, with the fund seeing a net outflow of .6 million. These outflows have continued to affect Bitcoin’s price negatively, given the amount of selling pressure it is piling on the flagship crypto.
At the time of writing, Bitcoin is trading at around ,300, down over 2% in the last 24 hours, according to data from CoinMarketCap.
Positive Market Turn: US Bitcoin ETFs See Substantial Inflows After Last Week’s Outflows
According to statistics, U.S. spot bitcoin exchange-traded funds (ETFs) saw their second consecutive day of positive inflows after recording approximately 8.3 million on Friday. During Monday’s trading sessions, the U.S.-based bitcoin ETFs accumulated 7 million in positive inflows, with Grayscale’s Bitcoin Trust (GBTC) also marking its second consecutive day of inflows. US Spot Bitcoin ETFs […]
Bitcoin News
Crypto Analyst Says Bitcoin Must Hold Above $51,800 As ETF Outflows Trigger Crash
The Bitcoin price continues to trend below ,000 as a 20% decline triggered a brutal market-wide crash. This has exposed multiple critical support points for the cryptocurrency, some of which the price has already fallen below. In light of this, a crypto analyst known as Norok has revealed the level the BTC price must not fall below to maintain its bullish trend.
Bitcoin Price Must Hold Above ,800
In an analysis posted on the TradingView website, crypto analyst Norok revealed that ,800 is now the most important support level for Bitcoin. Norok pointed out that Bitcoin has since returned to its last support level which was last seen in December 2023, making this a crucial support.
In the meantime, the support that had been built up by bulls at the ,000 level has since been broken by bears and has now been turned into resistance. Nevertheless, the crypto analyst does not believe that the Bitcoin price has turned bearish, despite the crash that has rocked the crypto market.
For Norok to turn bearish, he stated that the BTC price would have to break down below support at ,800. According to him, such a move will invalidate whatever bullish thesis is in play for Bitcoin, ending the bullish trend of 2023-2024.
In the short term, Norok identifies ,900 as a level that bulls must hold. He explains that this could help to reinforce the current bullish trend. “Price must hold here at this Support and then it can recapture the cloud to resume to Bullish Trend,” the crypto analyst said. “This is a highly decisive moment in Price action today.”
BTC Suffers As A Result Of ETF Outflows
One major driver of the Bitcoin price decline in the last few weeks has been a turn from inflows to outflows in Spot Bitcoin ETFs. Since these ETFs require the issuers to hold BTC to support the assets they are selling to investors, inflows are incredibly bullish as these issuers have taken to buying BTC to fulfill this requirement.
However, with investors beginning to withdraw their funds, the reverse has been the case, leading to a high selling pressure in the market. Spot Bitcoin ETFs have now recorded six consecutive trading days of outflows, reaching an all-time high outflow record 3.7 million on Wednesday, according to data from Coinglass.
If these outflows continue, then the BTC price could continue to decline, and at the current rate, the pioneer cryptocurrency might be testing Norok’s ,800 soon enough. However, a turn toward inflows would mean issuers have to buy BTC and this can translate to a price recover.
US Spot Bitcoin ETFs Report 5 Straight Days of Outflows, Totaling $635 Million
On Tuesday, U.S. spot bitcoin exchange-traded funds (ETFs) registered their fifth consecutive day of net withdrawals, documenting a substantial 1.6 million in negative outflows. Over the last two days, Grayscale’s Bitcoin Trust (GBTC) has offloaded 1,731.56 BTC, diminishing its reserves to 296,713.90 BTC. Bitcoin ETFs Continue to See Persistent Outflows Since April 24, 2024, U.S. […]
Bitcoin News
Crypto Funds Mark 3rd Consecutive Weeks Of Outflows With $435 Million In Withdrawals
Crypto investment products are now going through rough times, as shown by inflow and outflow data. The crypto market is known for its volatile market cycles of ups and downs. Investment products are now struggling, and confidence in the space seems shaken. Crypto funds have now seen outflows for three straight weeks, with investors pulling 5 million from digital asset funds last week, according to CoinShares data. The recent stretch of outflows highlights the souring investor sentiment around some digital assets after a bull run earlier this year.
The Third Consecutive Week Of Crypto Withdrawals
CoinShares’ recent weekly report on digital asset fund flows has revealed the current sentiment among institutional investors. According to the report, investment funds witnessed 5 million in outflows last week to mark the biggest outflow since March. This comes on top of the 6 million and 6 million pulled out in the previous two weeks. Unsurprisingly, the majority of outflows came from Bitcoin funds. Of the total 5 million outflows, 3 million came from Bitcoin funds. Notably, a bulk of Bitcoin’s outflows (8 million) came from Spot Bitcoin exchange-traded funds (ETFs) in the US.
A look into previous crypto fund flow data since the beginning of the year shows that the majority of the inflows recorded in January, February, and March can be attributed to the Spot Bitcoin ETFs. These ETFs recorded so much inflow of funds that investment products were able to record their best year on record in less than three months.
However, inflows into these ETFs have declined in the past few weeks, and the largest digital asset is now failing to attract inflows amidst interest rate stagnation in the US market. Grayscale’s GBTC, in particular, continued its run of withdrawals, recording 0 million in outflows. At the same time, the other ETFs failed to attract inflows during the week in order to offset these withdrawals. BlackRock’s IBIT, for instance, failed to register inflows for three days straight last week, bringing its 71-day run of inflows to an end.
Ethereum, the altcoin king, also witnessed .4 million in outflows last week to offset inflows into other altcoins. Inflow data shows investors pouring .9 million worth of inflows into multi-coin investment products. Solana, Litecoin, XRP, Cardano, and Polkadot witnessed .1 million, .1 million, .4 million, .4 million, and .5 million in inflows, respectively. Short Bitcoin products also witnessed .3 million in inflows, showcasing a glimpse into investors’ sentiment.
What’s Next?
Investor sentiment can shift quickly in the fast-moving crypto space and the coming weeks may provide more clarity on the direction of crypto fund flows. Six Spot Bitcoin and Ether exchange-traded funds (ETFs) are set to launch in Hong Kong today April 30. Their entry into the Asian market has been long anticipated and is expected to surpass the first-day inflow record set by their counterparts in the US.
GBTC Reserves Dip Below 300,000 BTC Amidst 3 Weeks of Crypto Fund Outflows
Grayscale’s Bitcoin Trust (GBTC) has witnessed a significant reduction in assets under management, with the trust’s holdings now falling below the 300,000 BTC mark, a key milestone. Additionally, the latest report on digital asset fund flows from Coinshares shows that bitcoin and ether exchange-traded products (ETPs) have seen withdrawals for three consecutive weeks. Heavy Withdrawals […]
Bitcoin News
Spot Bitcoin ETFs Rocked By Outflows, BTC Price Succumbs To Bears
The Spot Bitcoin ETFs have seen their demand drop since the start of this month, and this was again evident in the considerable outflows recorded on April 26. This poor run has had far-reaching effects on the broader crypto market as Bitcoin’s price has succumbed to unfavorable market conditions.
Spot Bitcoin ETFS Record 7 Million Of Outflows
Farside Investors revealed in an X (formerly Twitter) post that the Spot Bitcoin ETFs recorded 7 million of net outflows on April 25, one of their largest this month. Grayscale’s Bitcoin Trust (GBTC) accounted for most of these outflows, with investors moving 9.4 million out of the fund.
Related Reading: Why Is The Dogecoin Price Down Today?
Some other funds also recorded individual outflows. Ark Invest’s Spot Bitcoin ETF recorded .3 million in outflows, while Valkyrie and Bitwise’s ETFs saw million and million in daily outflows, respectively. Notably, Fidelity’s Wise Origin Bitcoin Fund (FBTC) recorded a net daily outflow for the first time since these funds were approved, with .6 being moved out of the fund on Thursday.
Meanwhile, BlackRock’s dry spell continued with its iShares Bitcoin Trust (IBIT) recording zero inflows for the second consecutive day. Although the fund has yet to record net daily outflows since launching, this undoubtedly represents a setback, considering that it had, before April 24, recorded 71 consecutive days of daily inflows.
These Spot Bitcoin ETFs’ outflows have led to a wave of sell-offs from the fund issuers to fulfill redemptions. As a result, Bitcoin’s price action has been rather unimpressive as of late, with the flagship crypto experiencing significant price declines due to the heightened selling pressure. This development has put the bears firmly in control, with data from Coinglass showing that more Bitcoin longs than shorts have been liquidated in the last 24 hours.
Macro Economic Factors Also Affecting Bitcoin’s Price
An initial estimate released by the Bureau of Economic Analysis on April 25 showed that the US Gross Domestic Product (GDP) grew at an annual rate of 1.6% in the first quarter, which was way below expectations. This data report further diminishes hopes of rate cuts this year and looks to have played out in investors’ minds as Bitcoin briefly dropped below ,000 following the report’s release.
Meanwhile, the Personal Consumption Expenditures (PCE) inflation data is set to be released on April 26. This PCE report could come in higher than expectations, adding to the growing concerns about the unlikelihood of rate cuts this year.
Interest rates have significant implications on risk assets, including crypto, and if the Federal Reserve decides to take a hawkish stance, it could negatively impact the crypto market.
‘No ETF Has Ever Done Anything Close’ — Analyst Highlights Record GBTC Outflows, Surpassing All ETFs
While Blackrock’s spot bitcoin exchange-traded fund (ETF), IBIT, experienced a continuous influx for 71 days before halting this week, Grayscale’s Bitcoin Trust (GBTC) holds the record with 72 consecutive days of outflows, surpassing all other ETFs on record. “No ETF has ever done anything close to that,” observed Eric Balchunas, Bloomberg’s senior ETF analyst, on […]
Bitcoin News