ETF Day 1 Flows = $625M Positive

[adaseb]

Credit goes to Bitmex research at

https://x.com/BitMEXResearch/status/1745856528983171294?s=20

Despite the horrible selling by GBTC, their outflows were only $95M. I assumed they would sell $1B worth and $1B of positive flows would cancel out. Either way here are the numbers

BITB +$237.9M
HODL +$10.6M
GBTC -$95.1M
FBTC +$227M
IBIT +$111.7M
EZBC +$50.1M
ARKB +$65.3M
BTCO +$17.4M
BTCW +$1M

So its not bad as it looks. I think when BITO went live it had $500M in net positive flows. So why the selling?

EDIT: Valkryie posted theirs at $29.4M so total right now is +$655M

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[dragonvslinux]

Let's put things into perspective; the ETF volume was "only" 5% of total Bitcoin volume. Sure it's not insignificant (as I've previously suggested), but doesn't influence the market what so ever, it only follows.

Then have a look at some of the older Bitcoin products out there and the amount of selling that occured; BITS had an enormous red candle, the largest ever recorded, likewise with GBTC that had largest sell volume since at least pre-2017, possibly ever (although candle shows green, it was in the red). BITO had largest ever Daily red selling volume since launch, likewise with XBTF and BITC.

So the summary goes, Wall St older products sold to Wall St newer products. Because "buy the rumour sell the news" has been a tried and tested strategy for over a century. People want to consider Bitcoin as now being "TradFi" and all the "good" that come with it such as price stability, but first it's best to acknowledge the "bad" that arrives initially. It usually starts with a big sell off - welcome to "TradFi".

[GreatArkansas]

This is a good sign in the first days of ETF, expect to continue this to increase event the price of Bitcoin is dumping, these people will not care at all.

It seems what happened with recent ETF approval is "Buy the rumors, sell the news".
A lot of people expected that Bitcoin would do a massive pump on the approval but it's not. I believe our recent climb up to $40,000 is already the effect of ETF approval, then after that, some people started to dump and take profits.

[bbc.reporter]

@GreatArkansas. However, it might not be sell the news. I have not been following the updates one Barry Silbert, Grayscale or GBTC, @fillippone is the best person to ask about this. However, according to this article, it explains that Grayscale is presently the biggest seller of bitcoin after GBTC received the approval to be converted to an ETF.



The world’s largest bitcoin fund, Grayscale’s GBTC, was once a Pacman-like entity, insatiably hoovering up bitcoin. When GBTC was a trust trading on OTC Markets, it had no mechanism for retail investors to sell any of its bitcoin holdings.

For a full decade, GBTC gradually acquired more and more bitcoin, cresting a staggering net asset value of $30 billion earlier this month. Then on January 10, everything changed when the SEC approved GBTC’s conversion into an ETF.

For the first time in history, GBTC began systematically selling bitcoin.

What’s more, it wasn’t the choice of any Grayscale trader to sell; selling was a requirement. As an ETF fund manager, Grayscale must ensure that GBTC’s share price tracks the price of bitcoin.

Of course, that price tracking requires selling and buying bitcoin every day to ensure that GBTC’s quantity of bitcoin in custody matches bitcoin’s fluctuating price and corresponding GBTC share price.

One week ago — literally, overnight — GBTC became the world’s number one seller of bitcoin. Even with the currency’s price in decline since the SEC approved 11 spot ETFs, market participants are still struggling to accommodate Grayscale’s gigantic sell orders.

Source https://protos.com/grayscale-bought-bitcoin-for-a-decade-then-became-its-1-seller-overnight/

[dansus021]

Source:
https://twitter.com/Swan/status/1747627211559981463?t=o6Ih8ygNq4-VOTrdcFXj5g&s=19
https://twitter.com/CryptoRank_io/status/1747291342223360018?t=JgilQaEHFafsIgT4CaG9EA&s=19

Some selling some buying so I would consider this as a neutral movement

[Wind_FURY]

For the first time in history, GBTC began systematically selling bitcoin.

What’s more, it wasn’t the choice of any Grayscale trader to sell; selling was a requirement. As an ETF fund manager, Grayscale must ensure that GBTC’s share price tracks the price of bitcoin.

 

If that's true then it's not just the macro-economic conditions in legacy that would force a pre-halving Bitcoin crash. Barry Silbert will also be a part of that.

Bitcoin is already down about 10% from the top, and it's been merely one week.

To my fellow plebs, if you have extra savings and/or disposable income, you obviously know what you should do if another golden opportunity arrives.

[dragonvslinux]

For the first time in history, GBTC began systematically selling bitcoin.

What’s more, it wasn’t the choice of any Grayscale trader to sell; selling was a requirement. As an ETF fund manager, Grayscale must ensure that GBTC’s share price tracks the price of bitcoin.

 

If that's true then it's not just the macro-economic conditions in legacy that would force a pre-halving Bitcoin crash. Barry Silbert will also be a part of that.

Bitcoin is already down about 10% from the top, and it's been merely one week.

To my fellow plebs, if you have extra savings and/or disposable income, you obviously know what you should do if another golden opportunity arrives.

I heard this too today. GBTC is off-loading, many were under the impression that this would take a few days. So far, they have only sold around 6%... so still plenty to go. The ETF inflows are overall still positive even when subtracting GBTC selling, but what's more concerning is the ~580K Bitcoin GBTC still holds and that so far the selling has been very conservative, so could obviously become more aggressive.

I read on WO some people thought that "the GBTC sell off is over" a few days ago, whereas in fact it's only just begun. It's the time to be uber cautious right now, with the only hopium that GBTC are selling OTC (ideally directly to the new ETFs) which would reduce the impact on the spot market, but otherwise this is a black swan event waiting to happen if GBTC suddenly decide to pull the trigger. This isn't intended as FUD, even though I can see how it would be interpreted. I'm not saying GBTC are suddenly going to start selling a tonne of Bitcoin (only that it's possible and that they have begun selling, which is simply a reality) and that they have plenty more to sell (which is also a fact). There are no doubt many ways this could (and should be) done without impacting the price of Bitcoin, so let's just hope they follow these procedures.

Either way, this could lead to a great buying opportunity, if GBTC simply continue to conservatively sell around 6% a week, within around 4 months it'd be the perfect time to buy.... once they're finished.

[bbc.reporter]

@dragonvslinux. Read the article I have shared. It mentioned that Grayscale will sell bitcoin if GBTC is on a discount to net asset value, however, this might also imply that Grayscale will buy bitcoin if GBTC is on a premium to net asset value.

Discount to net asset value is presently on -0.27%. Grayscale might only sell enough coins to close this to 0%. If people buy GBTC and it becomes a +1% premium to net asset value, it is required that Grayscale should buy bitcoin.

[dragonvslinux]

@dragonvslinux. Read the article I have shared. It mentioned that Grayscale will sell bitcoin if GBTC is on a discount to net asset value, however, this might also imply that Grayscale will buy bitcoin if GBTC is on a premium to net asset value.

Thanks for pointing out, that's interesting to note, although doesn't change my perspective much if I'm honest.

Discount to net asset value is presently on -0.27%. Grayscale might only sell enough coins to close this to 0%. If people buy GBTC and it becomes a +1% premium to net asset value, it is required that Grayscale should buy bitcoin.

Ideally there would be some sort of "balancing act" then. My overall concern is that investors have lost a lot of faith in Greyscale. Even if somewhat unfounded, the discount reaching -50% is a risk most investors won't want to unnecessarily take anymore - especially when there more reliable ETFs now available. My assumption is, those holding GBTC will continue to sell as the discount nears 0%, in order to transfer to more reliable ETF, as confirmed by many GBTC holders. I understand the theory that with a premium, Greyscale would likely be buying coins, but at the same time I think a premium ever sustainably happening again is very unlikely. The main reason why GBTC used to trade at such a premium, as high as 40% in recent years, and much more than that in the early years, is simply because there was no other Bitcoin-based ETF available.

For example; why would anyone with any sense buy GBTC at even a 1% premium, with the current highs fees, when there other ETFs without a premium and lower fees? Only a tiny minority would do that in my opinion. In the meantime, the only realistic direction for the future of GBTC is redistribution into more trusted ETFs. Which is also what you'd expect after Greyscale's effective ETF monopoly has ended. Correct me if I'm wrong here, but GBTC continuing to offload Bitcoin seems highly likely to me, even if it's possible for the selling to stop or even reverse into buying - I don't think that's a reality, at least right now.

[STT]

ETF arent supposed to run any premium or discount, its very tradable and much more efficient in that way.   I think over time we gain more people involved due to that efficiency, maybe Im a person wanting to hold my capital in BTC for this quarter and I dont want to be trapped in a web of discount and high fees like GBTC used to be like.  The performance from BTC going up disguised some of that but of course BTC fell so people will not forget being trapped like that.
  Its a see-saw situation, imbalance will confuse the market overall we are seeing alot of doji candles as these many orders come into market flow especially from funds previously tied up.   We are just reaching past a small downtrend today but I presume this is something we work out on the weekly bars it will take time to digest all this imbalance.  I still presume some selling perhaps in disappointment but its just the usual hype merry go round not a solid direction indication either way.

[darkangel11]

Ideally there would be some sort of "balancing act" then. My overall concern is that investors have lost a lot of faith in Greyscale.

Even if somewhat unfounded, the discount reaching -50% is a risk most investors won't want to unnecessarily take anymore - especially when there more reliable ETFs now available.

My assumption is, those holding GBTC will continue to sell as the discount nears 0%, in order to transfer to more reliable ETF, as confirmed by many GBTC holders. I understand the theory that with a premium, Greyscale would likely be buying coins, but at the same time I think a premium ever sustainably happening again is very unlikely. The main reason why GBTC used to trade at such a premium, as high as 40% in recent years, and much more than that in the early years, is simply because there was no other Bitcoin-based ETF available.

For example; why would anyone with any sense buy GBTC at even a 1% premium, with the current highs fees, when there other ETFs without a premium and lower fees? Only a tiny minority would do that in my opinion. In the meantime, the only realistic direction for the future of GBTC is redistribution into more trusted ETFs. Which is also what you'd expect after Greyscale's effective ETF monopoly has ended. Correct me if I'm wrong here, but GBTC continuing to offload Bitcoin seems highly likely to me, even if it's possible for the selling to stop or even reverse into buying - I don't think that's a reality, at least right now.

Is that a bad thing? Grayscale was popular because they offered something close to an actual ETF, while all the real ones were being delayed by the SEC. Since people who really support bitcoin and know what they're doing in the space came in (Fidelity) not many people will choose Grayscale. In fact nobody in their right mind will choose them as long as their fees remain where they are.
The only reason for low outflows is that people have to pay tax getting out, so many will not do that because they'd lose money on this conversion. I don't expect any inflows to their trust in the coming months, but the outflows may stabilize, at least until bitcoin goes up.

The real "problem" that we're facing is that all the big buyers get their coins OTC, while GBTC sells on spot markets. The silver lining in all this is that they're buying so much OTC that they're going to run out after the halving because the main source of OTC sales are miners.