Bitcoin ETF Outflows Hit $58 Million, GBTC Outflows Slow Down

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This week on Tuesday, April 16th, Bitcoin spot ETFs experienced a net withdrawal for the second day in a row. According to Farside Investors’ data, the amount withdrawn from these ETFs was approximately $58 million. The Bitcoin ETF market has seen relatively low activity in recent periods.

GBTC Outflows Slow Down

This week, the amount of bitcoin leaving the Grayscale Bitcoin ETF (GBTC) has decreased noticeably. On April 18 alone, GBTC experienced outflows of approximately $79.4 million. To put it into perspective, the total outflows from this ETF now reach an astounding $16.46 billion. Intriguingly, Ark Invest’s Bitcoin ETF (ARKB) also reported net negative outflows on Tuesday, amounting to $13 million.

In recent days, both the outgoing funds from the GBTC and the incoming funds to Bitcoin spot ETFs like BlackRock’s IBIT have decreased. However, on Tuesday, IBIT saw the largest net inflow among Bitcoin spot ETFs, with approximately $25.78 million added. As a result, IBIT’s total assets under management have reached over $15.3 billion.

Net Zero Inflows In Bitcoin ETFs A Concern?

According to James Seyffart, an analyst at Bloomberg, it’s normal for Bitcoin ETFs to have days with no new investments (inflows). This isn’t a sign of failure for these products. In fact, most U.S. ETFs, regardless of sector, often see zero inflows on a given day.

Okay too many questions about #Bitcoin ETFs and zero flows — a few quick thoughts:

Most days, around 3,500 ETFs in the United States experience no net inflows or outflows – this is typical. Yesterday, 2,903 of these ETFs showed no change in their assets.

— James Seyffart (@JSeyff) April 16, 2024

James Seyffart describes how shares in ETFs are produced or withdrawn through creation units, which happens only when there is a large difference between the number of buyers and sellers. This difference must be considerable to motivate interaction with the underlying market and exceed the size of a creation unit.

In simpler terms, a creation unit refers to the grouping of ETF shares that are bought or sold as a single unit during the creation and redemption process. Each ETF may have its own specific size for these units. For example, in the case of Bitcoin spot ETFs, the creation units consist of blocks containing between 5,000 to 50,000 individual shares.

In other words, a creation or redemption process will only occur when there is a large difference between the amount of an asset available and the demand for it, and when the expenses of carrying out this transaction are less than those of using regular market-making and hedging techniques.

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2024-04-17 08:41