In a recent episode of Reuter’s Inside ETFs, Grayscale CEO Michael Sonnenshein discussed Bitcoin ETFs, causing a stir in the global crypto market. According to Sonnenshein, outflows from the Grayscale Bitcoin Trust (GBTC) might be levelling off after prolonged selling by investors, catching the attention of investors on April 10.
Since the U.S. SEC gave its approval for Bitcoin ETFs, Grayscale has had to deal with intense competition in the Bitcoin ETF sector. The CEO’s recent statement that outflows might be leveling off has brought optimism among traders and investors, suggesting that selling and buying forces in the market could soon reach a balance.
Grayscale CEO Unravels Intricacies For His Statement
Interestingly, despite the massive withdrawals from Grayscale Bitcoin Trust (GBTC) totaling over $15 billion in the past three months, according to BitMEX Research, Bitcoin’s price surge has helped Grayscale minimize the effect on its managed assets, softening the blow at $23.13 billion. As Sonnenshein explained, “We believe that the fund is approaching a balance point where most of the anticipated outflows – whether it was bankruptcy selling or investors switching strategies – have occurred.”
Grayscale’s CEO brought a note of market positivity to GBTC as its price could potentially level off in the near future. This optimistic view reflects the balance between supply and demand, with outflows approaching an even keel. The CEO explained that some outflows were due to investors selling GBTC to invest in other Grayscale ETFs right away. Additionally, he mentioned that other outflows stemmed from selling linked to the bankruptcy proceedings of FTX and other failed crypto companies.
Further Insights Into The Matter
Additionally, many crypto companies that went bankrupt in 2022 and 2023 held Grayscale’s trust shares on their financial statements. In an attempt to pay off their creditors, these firms have tried to sell these shares since the product transformed into an ETF. Nevertheless, this trend has not been fully captured in transaction data yet.
Despite a significant decrease in daily withdrawals, falling below the $600 million threshold set in March, these withdrawals indicate persistent pessimism in the market as Grayscale experienced outflows totaling $303 million on Monday. However, optimism remains as Grayscale’s CEO suggests that outflows could be leveling off, leading to a more stable and potentially rising price trend for GBTC in the market.
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2024-04-10 19:54