The noose is tightening at Grayscale!

Fri 22 Mar 2024 ▪ 4 min reading ▪ by Mikaia A.

At this breakneck pace, Grayscale's Bitcoin reserves risk running out by the end of July, some crypto analysts warn. The cause of this agitation? Massive outflows of BTC from their ETF which continue unabated. And it's not about to calm down any time soon.

Bitcoin boat and coins

Grayscale Bitcoin Trust: Massive outflows, a warning signal?

The figures concerning Grayscale's GBTC outflows are more than alarming. On March 18, outflows amounted to $642.5 million. The next day, that figure dropped to $443.5 million. As of Thursday, March 21, Grayscale's Bitcoin Spot ETF outflow total for the week reached $1.4 billion.

However, this hemorrhage of funds, which not failing to affect Bitcoin (BTC)is far from diminishing.

Cryptocurrency asset manager Grayscale's Bitcoin exchange-traded fund (ETF) records a new day of massive outings, reports Cointelegraph. On March 21, almost $359 million were withdrawn from the fund, fueling fears, but analysts see an end to this exodus soon.

This $358.8 million net outflow from the Grayscale Bitcoin Trust (GBTC) follows a tumultuous week, marked by the record $642 million outflow on March 18 reported by Farside Investors.

These recent releases bring $1.8 billion total cash outflows this week for GBTC, marking the fourth consecutive day of net outflows across all 10 Bitcoin ETFs.

GBTC outflows – Source: Farside Investors

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

An independent researcher, ErgoBTC, pointed out that around $1.1 billion of recent GBTC outflows appear to be linked to bankrupt crypto lender Genesis. This correlation raises questions about the financial health of the sector and the potential impact on the Bitcoin market.

End in sight for Grayscale releases?

Analysts foresee the end of grayscale cash outflow trend imminent. Eric Balchunas of Bloomberg ETF argues that most of these exits are linked to bankruptcies in the crypto sector, and that the worst may be over.

Erich Blachunas' analysis of Grayscale's cash outflows

The more I think about it, the more likely it is that the increase in flows is linked to bankruptcies due to their size and consistency. The February flows showed what retail outflows look like, smaller and more random. Additionally, Gemini/Genesis outflows likely purchased BTC with cash, which is why the market is holding up. Conclusion: the worst is probably about to end. Once it is, only individuals will remain and the flows should gather more in the February runoff. »

Balchunas suggests that the outflows of Gemini or Genesis, two heavyweights in the sector, could soon be reinvested in Bitcoin, thus supporting the market. An analysis which perfectly matches that of ErgoBTC.

Discover our free newsletter This link uses an affiliate program

This anticipation suggests a possible turnaround, with an expected strengthening of the cryptocurrency market in the near future.

Maximize your Cointribune experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.

Mikaia A. avatarMikaia A. avatar
Mikaia A.

The blockchain and crypto revolution is underway! And the day when the impacts will be felt on the most vulnerable economy in this world, against all hope, I will say that I had something to do with it


The comments and opinions expressed in this article are those of the author alone, and should not be considered investment advice. Do your own research before making any investment decisions.

Related Posts

$9.5 billion options expire this Friday

8:29 a.m. ▪ 3 min reading ▪ by Fenelon L. This Friday, crypto derivatives exchange Deribit is preparing to experience one of the largest Bitcoin options expirations…

Towards a bitcoin supply crisis?

2:00 p.m. ▪ 4 min reading ▪ by Luc Jose A. While the wind of the resumption of its upward momentum is still making people happy, there…

A drop below $50,000 before the Bull Run?

Wed 27 Mar 2024 ▪ 3 min reading ▪ by Eddy S. Bitcoin, the cornerstone of the cryptocurrency market, is facing unprecedented turmoil in 2024. CryptoQuant CEO's…

the halving is less than a month away, what will change?

It is the most attended event in the crypto ecosystem. The Bitcoin (BTC) halving is fast approaching, and it is generating its share of hope and transformations….

woman arrested in possession of 2 billion pounds (GBP) of cryptocurrencies

It is the largest cryptocurrency seizure in UK history. A woman has just been found guilty of setting up a vast money laundering enterprise, which used several…

ETNs are coming soon to the London Stock Exchange

The London Stock Exchange (LSE) announced on Monday the upcoming arrival of Exchange Traded Notes (ETN) Bitcoin (BTC) and Ethereum (ETH) on its Exchange. What are the…

Leave a Reply

Your email address will not be published. Required fields are marked *