Outflows from GBTC top $358 million but one theory suggests it's almost over

It was another big day of outflows from Grayscale's Bitcoin ETF, but analyst Eric Balchunas believes it will soon ease

Outflows from GBTC top $358 million but one theory suggests it's almost overNEWS

On March 21, the Bitcoin exchange traded fund (ETF).
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Asset manager Grayscale reported another day of strong outflows, with nearly $359 million exiting the fund, but analysts believe the phenomenon could soon end.

Grayscale Bitcoin Trust's (GBTC) March 21 net outflows of $358.8 million follow a week of massive outflows, with $642 million recorded on March 18, according to data from Farside Investors.

GBTC outflows have reduced since Monday. Source: Farside Investors
The latest data brings total weekly outflows for GBTC to $1.8 billion and marks the fourth consecutive day of net outflows for all 10 Bitcoin ETFs.

In a March 21 post on "and their consistency".

“All the Gemini/Genesis outflows are probably buying BTC [with] cash, so the market is holding,” Balchunas said.

"It follows that the worst is [probably] nearing the end. Once it's over, only the detail will remain and the flows should look more like the 'drip' of Feb," he added.

Source: Eric Balchunas
As of March 21, Grayscale reported that its Bitcoin Trust held a total of $23.2 billion in assets under management. GBTC has lost $13.6 billion since converting to an ETF on January 11.

Related: Spot Bitcoin ETFs Record Third Straight Day of Net Outflows

In line with Balchunas, pseudonymous independent researcher ErgoBTC has suggested that around $1.1 billion of GBTC outflows recorded in recent weeks appear to have come from Genesis, a failing crypto lender.

Source: ErgoBTC
“The resulting business volumes and timing of capital out of GBTC and into Genesis stack up quite well,” ErgoBTC said. “There simply aren't that many trades of 2k BTC per day, so outflows from GBTC and inflows into Genesis are likely to be correlated.”

Pseudonymous crypto market watcher WhalePanda expressed a similar opinion, pointing to a March 19 statement from Genesis that said the firm would return assets to creditors "in kind" — meaning the defunct lender would sell GBTC shares in exchange for Bitcoin.

On Feb. 14, Genesis received approval from a U.S. court to begin liquidating $1.3 billion worth of GBTC shares in an effort to repay its creditors.

Nearly a month earlier, bankrupt crypto exchange FTX sold 22 million GBTC shares, worth nearly $1 billion, completely liquidating all of its holdings.