Bitcoin ETF has a single-day net outflow. Why is it so important to monitor ETF water pipes?

How to check the net inflow/outflow data of Bitcoin $BTC spot ETF?

【Don’t Ask for Help Series】

1. Farside data: https://farside.co.uk/?p=997

2. The Block Data: https://theblock.co/data/crypto-markets/bitcoin-etf/spot-bitcoin-etf-flows

Q: Why should you care about knowing bits What are the inflows and outflows of currency ETFs?

Bitcoin spot ETFs play a key role in U.S. stock funds and are the main channel for funds to enter the cryptocurrency market. As long as this channel remains stable, Bitcoin’s performance won’t be too bad.

Q: Really? How much money does the ETF pipeline bring?

BlackRock and Fidelity have been leaders in the ETF market. Together, they hold more than 500,000 bitcoins, which has brought more than $30 billion in capital inflows to the entire industry. These funds are real funds, not virtual currencies. It is worth mentioning that the inflow of these funds has had a profound impact on the Bitcoin market and brought an important impetus to the development of the digital asset market.

Data source: https://coinglass.com/bitcoin-etf

Q: Why emphasize “net” inflow?

A: Because Grayscale $GBTC investors are continuing to redeem BTC, that is, "outflow". Including GBTC outflows, net inflows into the 11 ETFs still exceeded $12 billion.

Q: Have many ETFs begun to flow out? A: Basically only grayscale is constantly flowing out.

Some data:

Before the ETF was approved, Grayscale’s “small ETF” had accumulated 600,000 Bitcoins;

After more than two months of ETF approval, Grayscale still had Place 380,000 Bitcoins.

Q: Grayscale is the main contributor to the ETF’s approval. Why does it keep flowing out?

A: Two reasons.

(1) Migration requirements: Grayscale’s management fee is very expensive, and the annual management fee is 1.5%. Other institutions generally charge 0.2%-0.25%, and some even waive the fee.

(2) Exit demand: Grayscale was established very early. $GBTC investors opened an average position of about $27.8 (from: webull). The current price is $57.4, which has doubled.

$Big investors in GBTC include the bankrupt 3AC and FTX, which have strong motivation to ship.

As for BlackRock’s $iBTC, the average cost is probably around $30, but now it’s only $36, so there is relatively little incentive to exit.

Q: Why doesn’t Grayscale lower its fees?

Grayscale: There are plans to gradually reduce fees in the next few months.

Grayscale CEO’s defense: We have the historical performance to prove that we dare to charge this fee. Other companies have no historical performance, so they naturally have to reduce fees and promote promotions.

PS1: This sophistry is a bit humorous. Putting aside the fact that GBTC and iBTC rose and fell at the same time, Bitcoin’s K-line is the common “historical performance” of all ETFs.

PS2: This kind of vague rhetoric ≈ no plan, just take it step by step.

PS3: Mainly economic accounts. 1.5% to 0.25% is too much. Even if Grayscale’s share drops to 1/6, which means another 300,000 BTC will flow out, it will still make more money without reducing fees.

PS4: It’s a pity that investors are lazy. If it is already in the ETF, it is too lazy to take it out; if it is already taken out, it is too lazy to put it back. Therefore, many of the huge GBTC redemptions "accidentally" turned into real selling pressure.

Q: How big is the selling pressure on GBTC?

A: On March 18, GBTC withdrawals broke the record, with 640 million US dollars withdrawn in one day, resulting in one of the few net outflow days in the history of BTC ETF, with the net outflow amount reaching 150 million US dollars.

This may also be an important reason for yesterday's sharp drop.

PS: Make a small comparison.

Now $BTC is mined 6.25 * 144 = 900 BTC every day; it will become 450 BTC after the halving in one month. In other words, the halving reduced the daily selling pressure by US$28 million.

Q: How many BTC does Grayscale have?

A: 380,000 pieces, disclosed on the official website. https://etfs.grayscale.com/gbtc

Q: So how was last night (March 19)?

A: Grayscale once again redeemed 440 million US dollars in BTC, while BlackRock was slightly weak, with only 75 million US dollars flowing in, resulting in an outflow of 300 million US dollars, which was larger than yesterday.

Finally, pay attention to emotions and data. Treasures are often hidden in the moment of change.

I wish you all a smooth landing and a finger on the pulse.

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