The Rise and Fall of Inflows to Grayscale’s Bitcoin ETF: A Closer Look

The Grayscale Bitcoin Trust (GBTC) ETF, which had seen rare inflows in May after a prolonged period of outflows, experienced a quick turnaround as outflows returned within just two days. According to data, the GBTC ETF recorded inflows totaling $66.9 million on May 3 and 6, with $63 million and $3.9 million coming in on each respective day. However, this positive trend did not last long, as outflows of $28.6 million and $43.4 million were reported on May 7 and 9, undoing the recent investments.

Interestingly, Grayscale was the only spot Bitcoin ETF issuer to report outflows during this period, while the rest of the nine Bitcoin ETFs approved by the United States Securities and Exchange Commission (SEC) either recorded positive or no investments. On average, the Grayscale Bitcoin Trust has been losing $211 million daily since its launch, while the other ETFs have managed to maintain a positive net balance of $11.7 billion.

Among the other Bitcoin ETF issuers, BlackRock’s iShares Bitcoin Trust attracted the highest investments, accumulating nearly $15.5 billion to date. Fidelity’s Wise Origin Bitcoin Fund, Bitwise Bitcoin ETF, and Cathie Wood’s ARK 21Shares Bitcoin ETF also saw positive net inflows of $8.1 billion, $1.7 billion, and $2.2 billion, respectively.

VanEck CEO Jan VanEck, speaking at Paris Blockchain Week in April, noted that the retail sector accounts for 90% of Bitcoin ETF inflows, with some institutional investors already exposed to Bitcoin. However, he anticipated major institutional investments from banks and traditional firms to enter the market by May.

Overall, the dynamics of the Bitcoin ETF market continue to evolve, with Grayscale’s GBTC ETF facing challenges in maintaining positive inflows amidst a competitive landscape. Investors will be closely watching how these trends develop in the coming months.