An estimated $1.1B will flee GBTC when ARK starts buying its own Bitcoin ETF
An estimated $1.1 billion has flowed out of the grayscale spot bitcoin (BTC) exchange-traded fund (ETF) over the past three days, after it hit its lowest level in nearly three years as investors rushed to exit the fund.
Only $594 million in outflows came from the third day of trading on Jan. 16, according to a post by Bloomberg ETF analyst James Seifert on X (formerly Twitter).
Seifert noted inflows from other recently launched Bitcoin ETFs, but he wasn't sure if those flows exceeded Greyscale Bitcoin Trust's ( GBTC ) flow on Jan. 16.
“Most have seen other revenues but doubt it will be enough to offset the nearly $600 million in $GBTC.”
Today could be a day of net outflows for #bitcoin ETFs. Approximately ~$594 million is left from $GBTC for a total cost of $1.173 billion. Most have seen other revenues but doubt it's enough to offset nearly $600 million from $GBTC https://t.co/elD9qkyjj2
— James Seyff (@JSeyff) January 17, 2024
Seifert and other analysts have noted that there may be discrepancies when calculating flows due to the accounting and settlement processes typically associated with trading stocks.
For many years, GBTC has offered a profitable trade for investors who took money to enter the fund and then profited on Greyscale's premium, reaching up to 43% in July 2019, according to YCharts data.
In the year The GBTC arbitrage business evaporated in February 2021 when the premium was suddenly reduced. Due to the minimum six-month lock-up period imposed on investors who buy GBTC shares, many investors are stuck in the fund, refusing to sell their shares continuously. Worst discount.
After GBTC converted to a spot ETF, the discount dropped as low as 1.55%, investors who had their money locked up for longer are now hitting the exits.
The estimated cost of GBTC is $1.17 billion with 27,000 bitcoins at the current price of around $42,800.
Excluding GBTC, 35,761 bitcoins were held by nine other bitcoin ETF issuers, according to X account CC15Capital.
In addition to Greyscale's 605,891 bitcoins, BlackRock and Fidelity ETFs made 11,439 and 9,750 BTC respectively, according to CC15Capital data.
However, the Bitcoin holdings of each ETF issuer may not be up-to-date.
Update 1 for 1/16 Bitcoin ETF activity $BITB posted its first update and an increase of 1,172 #Bitcoin pic.twitter.com/t2BexSY8qQ
— CC15Capital (@Capital15C) January 17, 2024
Related: Coinbase, GBTC selloff shows Bitcoin price strength at $43K
Meanwhile, Cathy Wood's ARK Invest has begun sorting its own recently approved ARK 21Shares Bitcoin ETF ( ARKB ) and has sold ProShares Bitcoin Strategy ETF ( BITO ) and other tech-focused stocks in the ARK Next Generation Internet ETF.
ARK launches its own bitcoin ETF
It was simply a matter of time. https://t.co/Z8P4nMGBNO
— Nate Geraci (@NateGeraci) January 17, 2024
ARKB currently holds 2,535 bitcoins worth over $109 million.
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