- Grayscale saw positive BTC ETF inflows for the first time in over four months.
- BTC was trading above the $64,000.
Over the past few weeks, the spot Bitcoin ETF experienced continuous outflows, reaching a peak with the largest outflow volume recorded on the 1st of May.
Similarly, Grayscale, currently holding the largest Asset Under Management (AUM) and ETF market cap, also witnessed outflows until recently. Could the reversal in ETF flow influence the price trend of BTC?
Bitcoin ETF sees the second day of inflow
Analysis of the Bitcoin ETF Net Inflow revealed a notable shift as it returned to positive territory following several consecutive days of outflows.
AMBCrypto’s examination of the flow chart indicated that the spot ETF experienced outflows from the 24th of April to the 2nd of May. It reached its peak outflow volume on the 1st of May, exceeding $563 million.
Source: Coinglass
However, on the 5th of May, it marked a significant turnaround with the first inflow in weeks, amounting to over $378 million.
This positive trend continued on the 6th of May, recording a consecutive inflow of $217 million. After over four months, Grayscale observed its first inflow during this period.
Grayscale records its first Bitcoin ETF inflow in months
AMBCrypto’s analysis of the Grayscale Bitcoin ETF Netflow metric on Coinglass indicated a consistent trend of outflows since January.
According to data from Coinglass, Grayscale boasts the largest spot BTC ETF market cap, exceeding $18 billion at the time of this writing.
Additionally, it maintains the largest Asset Under Management (AUM), surpassing $18 billion. Given the substantial size of its holdings, the ongoing outflows in recent months have prompted inquiries.
Source: Coinglass
However, on the 6th of May, a significant shift occurred as Grayscale experienced its first inflow. The chart displayed a $64 million inflow, marking the end of the outflow streak.
Since its transition from a trust to a readily tradable ETF, GBTC has witnessed withdrawals of about $17.46 billion.
Some of these outflows may be attributed to repayments by crypto firms that faced bankruptcy in recent years.
What the ETF inflow means
Inflows for a spot Bitcoin ETF signify the capital invested in the ETF by investors. These inflows increase the AUM of the ETF and can signify heightened investor appetite for Bitcoin exposure.
Conversely, outflows denote the funds transfer out of the spot Bitcoin ETF. This occurs when investors divest their shares in the ETF, leading to a reduction in its AUM.
Outflows may transpire due to diverse factors, including investors realizing profits, adjusting their portfolio allocations, or reacting to shifts in market dynamics.
Impact of BTC’s price?
The present uptick in ETF inflows may suggest a resurgence of investor interest following a phase of profit realization. This renewed engagement could bolster the price of BTC in the short term.
However, while alterations in ETF flows might influence short-term fluctuations in Bitcoin’s price, they constitute merely a part of the larger picture.
Read Bitcoin’s [BTC] Price Prediction 2024-25
Numerous other variables exist that could exert influence on the overarching price trajectory over the long haul.
AMBCrypto’s look at Bitcoin’s price trend revealed a notable recovery from its earlier dip below the $60,000 mark. As of this writing, it was trading at around $64,290, showcasing an increase of over 1.7%.
Source: TradingView
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