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- Unexpected exodus of GBTC investors following ETF approval, defying expectations and redefining the crypto market.
- Bitcoin ETFs attract $1.4 billion in two sessions, marking a significant milestone and triggering changes in the ecosystem.
More than $1 billion in two trading sessions has redefined the Bitcoin ETF landscape. Grayscale’s Bitcoin Trust (GBTC), while experiencing a $579 million outflow, did not stop the upside momentum. Spot Bitcoin ETFs recorded impressive inflows totaling $1.4 billion, defying initial expectations.
Bloomberg ETF specialist Eric Balchunas reveals impressive statistics: 500,000 trades in two sessions, with total trading volume of $3.6 billion.
This phenomenon, known as “the Newborn Nine” by market analysts, beats expectations by reaching an incredible net total of $819 million, leaving behind $579 million in GBTC outflows. iShares Bitcoin Trust (IBIT) leads with $500 million, followed closely by Fidelity Advantage Bitcoin ETF (FBTC).
LATEST: With two days in the books, the Nine Newborns have taken in +$1.4b in new cash, overwhelming $GBTC's -$579m of outflows for net total of +$819m. $IBIT now leading pack w/ half a bil, Fidelity close second tho. The newborns' $3.6b in trading volume on 500k indiv trades… pic.twitter.com/b7U5DjENaw
— Eric Balchunas (@EricBalchunas) January 13, 2024
Grayscale’s performance is not so simple
With a $579 million withdrawal, the question arises: why the massive outflow of investors? Anthony Scaramucci of SkyBridge Capital points out that some GBTC holders are experiencing losses and choosing to switch to lower-fee options.
Although the SEC’s approval of ETFs through a regulatory change has ushered in a new era, GBTC, a behemoth with a more than $27 billion cryptocurrency holdings, is facing unforeseen challenges.
Anticipation of ETF approval had predicted a “sell the news” scenario, and the bearish ones seem to be right. Bitcoin has posted a 6.8% decline between Jan. 11 and Jan. 12. Currently, its price hovers around $42,856, marking a slight drop of 0.77% in the last 24 hours.
what is the impact of this turmoil on the crypto market? How are investors affected? And, what does the future hold for GBTC after this episode? Let‘s dig into this chapter of Bitcoin’s evolution.
The last few trading sessions offer us an unprecedented situation
Bitcoin ETFs have captured an extraordinary amount of capital, challenging even GBTC’s outflows. But what are the reasons behind the GBTC pullback? The SEC’s approval of ETFs has triggered a shift in preferences among investors, some of whom choose more fee-efficient options.
The clear leader in these sessions is BlackRock’s iShares Bitcoin Trust (IBIT), standing out with impressive total flows of $497.7 million. It is closely followed by the Fidelity Advantage Bitcoin ETF (FBTC), which has accumulated $422.3 million, and then Bitwise (BITB) with $237.9 million.
Despite having played a pivotal role in managing more than $27 billion in cryptocurrencies, Grayscale Bitcoin Trust (GBTC) is facing an unexpected exodus. The recent opening of the exchange, signaling a new era after years of being solely tradable and non-exchangeable for Bitcoin, has brought with it unexpected challenges. Holders are opting to convert their shares, plunging GBTC’s future into unprecedented uncertainty.
Market assessment prior to ETF approval anticipated a “sell the news” phenomenon, and the 6.8% decline in Bitcoin’s value confirms this theory. The correction in value comes as no surprise to market analysts, as the Bitcoin price posted a significant 75% increase in the last 90 days prior to approval.
