Grayscale ETF with record payouts. Is this why the bitcoin price is falling?

Do we have a culprit for the decline? The Grayscale ETF has seen its largest daily fund outflow since its launch. As a result, spot BTC funds registered negative flows: GBTC lost USD 642 million in one day alone!

The Grayscale ETF is bleeding heavily

On March 18, as much as USD 642 million was withdrawn from the Grayscale ETF. This marks the largest daily fund outflow since the company's trust was converted to a spot ETF.

To understand the scale of what happened yesterday, it is worth adding that at the same time, the inflow of funds into the ETF fund owned by Fidelity – the second largest on the market – amounted to only USD 5.9 million. This is the lowest since the inception of the spot BTC ETF market.

So is Grayscale the reason why the bitcoin price is falling? In a sense, yes. We saw a similar phenomenon shortly after the creation of ETFs. The price of bitcoin did not increase immediately after their approval by the regulator. The reason was Grayscale's bleeding. The company's ETF offers high trading fees. As a result, investors withdraw their capital from it.

The above was combined with a natural correction of strong increases and perhaps “material memory” – in March 2020, bitcoin also experienced a significant correction, and it only started to grow strongly after the halving.

Market situation

Bitcoin is currently trading at $64,107, down 10.9% for the week. Since yesterday, the price has decreased by approximately 6%. The declines are gaining momentum, which may suggest that we are approaching the bottom.

Does all of the above mean that ETFs have stopped “working”. NO. Grant Englebart, vice president of investment firm Carlson Group, said BloombergTVthat currently only a “handful” of his firm's advisors have sold units of bitcoin funds to their clients. We are only at the beginning of this revolution.

Bloomberg ETF analyst Eric Balchunas confirms the above. He told X that he had heard from BTC ETF issuers that only a handful of investors were currently in the market.

So far only (single) people have opted for BTC, a handful of early adopters who inquire and then allocate

– wrote Balchunas.

Advisors are not yet courting the rest of their clients. All these flows come from inbound traffic

– added Balchunas, implying that the best is yet to come.

The above text does not constitute investment advice.