Over $500M Pulled from Grayscale, What’s Next For GBTC?

Investors have withdrawn more than $579 Million from Grayscale Bitcoin Trust (NYSE: GBTC) during the initial days of its trading as an ETF, which won the approval of the US Securities and Exchange Commission to convert from a trust.

It is a significant contrast from the other nine spot Bitcoin ETFs, which have collectively attracted almost $1.4 Billion, according to data compiled by Bloomberg. James Seyffart, an ETF analyst at Bloomberg Intelligence, said that this is the first time they had a clear view of GBTC flows due to the ETF conversion, and investors might be profit-taking. 

While the fund’s shares worth more than $2.3 Billion had been traded on its first day, the outflows indicate that a part of the volume was a result of selling. 

Zach Pandl, Grayscale’s managing director of research, said that total net inflows into Bitcoin investment products are what matters for prices, not substitution from one product to another. 

BlackRock Attracts Nearly Half a Billion Dollars in 2 Days

BlackRock’s IBIT has pulled in almost $500 Million in its first two trading days. Seyffart said that plenty of this capital would revert to other Bitcoin exposures, and some investors are moving to cheaper spot Bitcoin ETFs. 

The owner of Grayscale Bitcoin Trust (GBTC), Grayscale, moved an additional 9,000 bitcoins to an exchange on Tuesday. This occurs because since the product was changed to a spot exchange-traded fund (ETF), there has been a net selling of it. 

According to information from Arkham Intelligence, the coins moved in batches of 1,000 just after 14:30 UTC, which is when the U.S. stock market restarted after the three-day weekend.

Following the introduction of a spot ETF by US regulators last week, investors have been selling Grayscale’s GBTC for a variety of reasons, resulting in net outflows. The removal of the net asset value discount and reduced costs at rival exchange-traded funds are among the causes. 

The outflows have led to Grayscale selling 2,000 bitcoins last week. Currently, the number has risen to 11,000, which has taken GBTC’s holdings below 610,000 BTC.

Technical Analysis and Prediction of the GBTC Coin Price 

At press time, the GBTC stock is trading at the level of $38.2 after surging from the level of $24.8 in mid-October. The support levels were at $24.8 and $16.93 while the resistance levels are at $42.5 and $55.01.

The 50-Day EMA and the 150-Day EMA have done a bullish crossover, which implies a bull run in the GBTC stock price. 

Summary

BlackRock’s IBIT has attracted nearly $500 Million in its first two days of trading. Some investors are expected to move to cheaper Bitcoin ETFs, while others may shift to other Bitcoin exposures. According to Arkham Intelligence, large batches of coins were moved just after 14:30 UTC, coinciding with the restart of the U.S. stock market after the three-day weekend. GBTC stock has been on a bull run since last October.

Technical Levels

• Support Levels: $24.8 and $16.93
• Resistance Levels: $42.5 and $55.01

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos or related indexes comes with a risk of financial loss.

Steefan George is a crypto and blockchain enthusiast, with a remarkable grasp on market and technology. Having a graduate degree in computer science and an MBA in BFSI, he is an excellent technology writer at The Coin Republic. He is passionate about getting a billion of the human population onto Web3. His principle is to write like “explaining to a 6-year old”, so that a layman can learn the potential of, and get benefitted from this revolutionary technology.