Grayscale's Bitcoin Exchange-traded funds (ETFs) continued to witness substantial outflows on March 21, with nearly $359 million exiting the market. This trend follows a significant outflow recorded the previous week, notably a net outflow of $642 million on March 18, marking it as the largest single-day outflow on record. The latest data reveals that total outflows from Grayscale Bitcoin Trust (GBTC) reached $1.8 billion this week, signifying the fourth consecutive day of net outflows across all 10 Bitcoin ETFs.
Eric Balchunas, a senior analyst at Bloomberg ETFs, suggests that the majority of Grayscale's outflows may soon come to a halt. He speculates that most of these outflows are attributable to cryptocurrency firms facing financial strain due to scalability and consistency issues. Balchunas believes that any outflows from platforms like Gemini or Genesis are likely to be reinvested in Bitcoin, thus maintaining market strength. He anticipates that once the worst-case scenario subsides, outflows will diminish to a more subdued level akin to that of February.
As of March 21, Grayscale reported total assets under management for its Bitcoin Trust at $23.2 billion. Since transitioning to an ETF on January 11, GBTC has seen a decline of $13.6 billion. An anonymous independent researcher identified as ErgoBTC estimates that approximately $1.1 billion worth of GBTC outflows in recent weeks originated from the bankrupt cryptocurrency lender Genesis. The timing of these outflows aligns closely with funds flowing from GBTC to Genesis, suggesting a correlation between the two activities.
This sentiment was echoed by another anonymous cryptocurrency market commentator known as WhalePanda, who referenced a statement from Genesis on March 19. The statement indicated that the company would return assets to creditors "in kind," implying that the defunct lender would liquidate GBTC Exchange shares for Bitcoin. Genesis received court approval on February 14 to commence the liquidation of $1.3 billion worth of its GBTC shares to repay creditors. A similar scenario unfolded nearly a month ago when bankrupt cryptocurrency exchange FTX sold 22 million GBTC shares, totaling nearly $1 billion, to liquidate its entire holding.
