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Spot Bitcoin ETFs See Fourth Consecutive Day of Net Outflows, GBTC Bleeds $358M

The Grayscale Bitcoin Trust’s (GBTC) exchange-traded fund (ETF) saw considerable outflows yet again, with approximately $359 million leaving the fund on March 21st.

This continues a trend of significant outflows, as evidenced by the week prior, particularly on March 18th when a record single-day outflow of $642 million was observed, as reported by Farside Investors.

The latest data reveals a cumulative outflow of $1.8 billion for GBTC this week, marking the fourth consecutive day of net outflows across all 10 Bitcoin ETFs.

Grayscale Outflows Might be Nearing End

Analysts are optimistic that the ongoing trend of outflows from Grayscale’s fund could be nearing its end.

Senior Bloomberg ETF analyst, Eric Balchunas, has suggested that the majority of the outflows are attributed to bankruptcies within the crypto industry and anticipates that the worst phase might soon conclude. He further proposed that any outflows from Gemini or Genesis, both prominent industry players, are likely being reinvested into Bitcoin, thereby bolstering the market.

In a note on X, Balchunas remarked, “Takeaway: the worst is probably close to being over. Once it is, only retail will be left and flows should resemble more of a trickle akin to February.”

As of March 21, Grayscale reported that its Bitcoin Trust held $23.2 billion in assets under management.

Since its conversion to an ETF on January 11th, GBTC has witnessed a significant decrease in assets, shedding a total of $13.6 billion.

Independent researcher ErgoBTC highlighted that around $1.1 billion of recent outflows from GBTC appear to be linked to the bankrupt crypto lender Genesis.

“Activity volumes and timings of funds moving out of GBTC and into Genesis seem to correlate closely,” Ergo remarked. “Simply put, there aren’t that many 2k BTC transactions per day, so it’s likely that the outflows from GBTC and inflows into Genesis are interconnected.”

The timing and magnitude of the outflows align with Genesis’ activity, indicating a probable correlation between the two.

In February, Genesis obtained court approval to liquidate $1.3 billion worth of GBTC shares to settle its debts with creditors.

Before that, bankrupt exchange FTX liquidated its entire holdings by selling 22 million GBTC shares, valued at nearly $1 billion.

Bernstein Expects Bitcoin to Surge to $90,000

Despite the recent downturn in Bitcoin prices, investment firm Bernstein has adjusted its year-end forecast for the cryptocurrency upwards.

In a research note, Bernstein revised its bitcoin price target to $90,000, marking an increase from the previous projection of $80,000. The firm also expressed confidence in cryptocurrency mining stocks, attributing this sentiment to Bitcoin’s recent surge to approximately $74,000 and the favorable reception of new spot BTC ETFs.

Analysts Gautam Chhugani and Mahika Sapra from Bernstein highlighted several factors underpinning their optimistic stance. They pointed out the initiation of a fresh Bitcoin bull cycle, substantial inflows into ETFs, the aggressive expansion of mining capacity, and record-breaking revenues for miners.

These factors collectively render Bitcoin miners an appealing investment avenue for equity investors aiming to tap into the cryptocurrency market.

Furthermore, Bernstein has revised its forecast for the upcoming halving event in April. They now anticipate a 7% reduction in the hash rate, reflecting the computational power essential for bitcoin mining. This adjustment reflects a more positive outlook compared to their earlier projection of a 15% decline, as they foresee fewer shutdowns and industry consolidation.

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