Outflows from the Grayscale Bitcoin ETF rocked the market last week, leading to a dramatic drop in the BTC price. However, with the new week, there has been a change in direction as investors start to become optimistic about Bitcoin again. As a result, outflows from the Grayscale ETF have slowed, reaching one of the lowest points of the month.
Grayscale Bitcoin ETF Outflows Drop 60%
Grayscale outflows increased last week, marking the first time ever ahead of what would turn out to be a full week of outflows from Spot Bitcoin ETFs. The outflow rose rapidly during the week and even reached the new week. However, inflows into Spot Bitcoin ETFs have been on the rise, which has overshadowed outflows from GBTC.
Although GBTC outflows continue, things are starting to turn into a more positive story as the amount of BTC flowing out of the fund is rapidly decreasing. To put this in perspective: data shows on Wednesday, March 27, 299.8 BTC were withdrawn from the fund and on Thursday, March 20204, this figure fell to 104.9 BTC, representing a drop of 60%.
This marks the Grayscale Bitcoin ETF’s second lowest outflow day, right after the 79 BTC outflow on March 12. It also points to a decline in the volume of outflows as investors begin to level off and find their footing elsewhere.
Nevertheless, the GBTC has remained the loser of the Spot Bitcoin ETF race, with a full month of outflows so far. Since the ETFs were first approved in January, more than $14.6 billion has been withdrawn from the fund to date, accounting for about 50% of the total balance. These BTC have likely found a home in other Spot ETF funds that have seen massive inflows.
Unlike last week, this week’s inflows also dominated the Spot Bitcoin ETFs. Total inflows for the week exceeded $800 million, bringing total Assets Under Management (AuM) to almost $57 billion in less than three months.
Why this could cause a BTC price rally
The last time GBTC outflows experienced a slowdown after rising for about a week, it caused the Bitcoin price to respond in the form of a rally. The inflows continued to dominate in the coming weeks as well and during this time the BTC price experienced a prolonged recovery. In two months it went from $40,000 to over $70,000.
If this trend repeats this time, another massive BTC price rally could be just around the corner. A similar price increase would also push Bitcoin right above $100,000 in the coming months. In this case, the uptrend would be far from over.
At the time of writing, Bitcoin is still struggling to break $70,000 after dropping 1% over the past day.
BTC price jumps above $70,000 | Source: BTCUSD on Tradingview.com
Featured image from Which.co.uk, chart from Tradingview.com
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