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Grayscale's Bitcoin ETF Records First Net Inflow Since Market Debut

Turning the tide: Grayscale's recent inflow

Grayscale's Bitcoin Trust ETF experiences a positive shift in investor sentiment with its first net inflow of funds since becoming an ETF.

Key takeaways:

  • Grayscale's Bitcoin Trust records its first daily net inflow of funds since January, breaking a long streak of withdrawals.
  • Despite the competition from new ETFs like BlackRock's iShares Bitcoin Trust, Grayscale remains a major player in the Bitcoin investment landscape.

Grayscale's Bitcoin Trust (GBTC), the largest Bitcoin ETF by assets, has marked a significant shift with its first daily net inflow of funds since its transformation into an ETF in January, according to data from Farside Investors. This inflow of $63 million on Friday is notable as it signifies the first increase in daily funds since the product's inception at the start of the year.

Previously, GBTC was the preferred conventional investment vehicle for investors looking to expose their portfolios to bitcoin without the need to directly purchase the digital currency. However, the landscape shifted dramatically in January when GBTC transitioned to an easier-to-trade ETF format. Simultaneously, it faced new competition from nine other spot bitcoin ETFs, including BlackRock's iShares Bitcoin Trust (IBIT), which also began trading.

Since the conversion, GBTC has experienced substantial outflows, with its bitcoin holdings plummeting from over 600,000 bitcoins to around 290,000 bitcoins. This reduction reflects investors' response to the higher fees associated with GBTC compared to its competitors.

Despite these challenges, the recent inflow marks a potential turnaround. Although GBTC still leads with $18.1 billion in assets, IBIT is close behind at $16.9 billion. Having started from zero in January, IBIT's rapid asset accumulation underscores the intensifying competition in the Bitcoin ETF market.