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GBTC profit-taking phase has ended
GBTC funds are still expected to continue to flow out
Since Grayscale’s Bitcoin Trust Fund (GBTC) successfully transformed into a spot ETF, the downward pressure on Bitcoin caused by the outflow of GBTC funds has never disappeared. According to statistics from BitMEX, nearly $400 million in funds flowed out of GBTC again yesterday.
In its latest research report, JPMorgan also stated that profit-taking by GBTC investors (who bought during the period of premium) was the main driving factor behind this price correction. In addition, bankrupt exchange FTX liquidated approximately $1 billion in GBTC holdings, which also added additional selling pressure to the underlying digital assets of Bitcoin.
JPMorgan had previously estimated that the net outflow of GBTC would reach about $3 billion. The bank’s analyst team wrote in the latest report:
However, it should be emphasized that although the profit-taking activity of investors is coming to an end, it does not mean that the outflow of funds from GBTC will ease. According to the bank’s estimate, due to the much lower management fees of many newly launched Bitcoin spot ETFs compared to GBTC, approximately $1.3 billion has been transferred from GBTC to the newly launched spot Bitcoin ETFs, which is equivalent to $3 billion in outflows per month.
The report points out that if Grayscale reduces its management fees too slowly, this trend of fund outflows may continue. Moreover, if other Bitcoin spot ETFs reach a sufficient scale and liquidity to compete with GBTC, this fund outflow may further accelerate.
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