Crypto News- GBTC effect weakens: In the ever-evolving landscape of cryptocurrency investments, asset managers worldwide witnessed a significant shakeup last week. According to the latest report from CoinShares, crypto funds managed by industry giants such as BlackRock, Bitwise, Fidelity, Grayscale, ProShares, and 21Shares experienced net outflows totaling a substantial $500 million globally.
GBTC Effect Weakens: Crypto Funds Report 500 Million Dollars in Outflows
A standout in this exodus was Grayscale’s higher-fee converted spot bitcoin exchange-traded fund (GBTC), which continued to dominate the outflows, with a staggering $2.2 billion leaving the fund. However, there seems to be a silver lining, as the most recent data indicates that the impact is gradually subsiding. James Butterfill, CoinShares’ Head of Research, noted that daily outflows from GBTC have been decreasing consecutively over the past week.
Crypto Fund Flows: Shifting Tides in Global Investments as Grayscale Faces Exodus, New Bitcoin ETFs Rise
In contrast to the outflows from Grayscale, the spotlight is on the emergence of nine new spot bitcoin exchange-traded funds (ETFs). These newcomers attracted a total of $1.8 billion in inflows last week, with BlackRock’s IBIT and Fidelity’s FBTC leading the way with $744.7 million and $643.2 million, respectively. Since their launch on January 11, these nine ETFs collectively garnered around $5.8 billion in inflows, while GBTC saw $5 billion in outflows, resulting in a net inflow of $759.4 million.
Despite these positive flows, Bitcoin itself experienced a 14% drop from its peak of $49,000 on the day the spot bitcoin ETFs were launched, currently resting at $42,252. Butterfill attributes much of this price decline to the acquisition of Bitcoin seed capital before January 11.
Bitcoin investment products, in general, witnessed net outflows of $479 million, while short-bitcoin funds attracted inflows of $10.6 million. Altcoin-based funds mostly faced outflows, with Ether investment products seeing $39 million exiting. Notable exceptions were Solana products, which attracted $3 million in inflows, and blockchain equities, maintaining a ten-week inflow streak and adding $17 million.
Regionally, U.S.-based funds experienced dominant net outflows of $409 million, with Switzerland and Germany following suit with outflows of $60 million and $32 million, respectively. However, Brazil stood out with the largest net inflows of $10.3 million.
The recent price declines, triggered by substantial outflows from the leading ETF issuer, Grayscale, totaling $5 billion in the U.S., likely played a role in prompting further outflows from other regions, according to Butterfill. The cryptocurrency market remains dynamic, with the interplay of inflows and outflows shaping the financial landscape for investors and asset managers alike.
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