Bitcoin ETF Inflows Fall as Grayscale Sees Record Outflow

The Bitcoin ETF Craze is Cooling Down

The enthusiasm for Bitcoin ETFs seems to be fading as funds and institutional investors are slowing down their acquisition of BTC.

Grayscale, the world’s largest crypto asset manager, experienced a historic outflow of $643 million on March 18th, surpassing the previous daily record of $640 million on Jan. 22nd.

This new milestone amounts to approximately 9,600 BTC, as reported by BitMEX research.

Grayscale Witnessing Significant BTC Outflows

Since converting its fund to a spot ETF in mid-January, Grayscale has observed a nearly 40% decrease in its Bitcoin holdings. The company has seen an outflow of approximately 241,830 BTC over the last ten weeks.

Grayscale’s BTC holdings dropped from around 620,000 BTC at the beginning of the year to 378,169 BTC, according to their website.

Investors are withdrawing from Grayscale because they can now convert their shares directly into BTC, a feature not available under the previous GBTC structure. Additionally, Grayscale’s higher fees compared to other ETPs have prompted investors to adjust their portfolios.

In response, Grayscale is planning to launch the “Grayscale Bitcoin Mini Trust” under the ticker BTC, aiming to offer a more competitive option to investors.

Alongside Grayscale’s record outflow, there has been a decline in Fidelity’s FBTC fund inflow, with just $5.9 million entering on March 18th. BlackRock’s IBIT has also experienced a decrease in inflows over the last four trading days.

Overall net inflows have slowed down, dropping below $200 million in recent days following a peak inflow of over $1 billion on March 12th.

Minimal Bitcoin ETF Allocations

On March 18th, Grant Engelbart, the vice president and investment strategist at Carson Group, revealed on Bloomberg TV that only a few advisors are allocating an average of 3.5% of Bitcoin ETFs to client portfolios.

ETF analyst Eric Balchunas noted that this finding aligns with his observations, indicating that early adopters are currently leading the way in Bitcoin ETF allocations.

Despite these trends, Bitcoin’s price continues to decline, falling by 5% to $65,100 at the time of writing. BTC has corrected by 12% from its recent all-time high.