Grayscale’s Bitcoin Trust (GBTC) has seen a significant change in its fortunes as it experienced its first inflows in 78 days. On Friday, the trust received a $63 million infusion, equivalent to approximately 1,030 bitcoins.
GBTC, unlike other similar funds, has been in existence since 2013 and caters to accredited investors through the OTCQX market. It offers investors a way to gain exposure to BTC without the need for direct acquisition. Initially, investors were willing to pay a premium to hold shares in GBTC. In 2017, the premium skyrocketed to 132%, but by December 2020, it stood at 38.57%.
However, by February 2021, the premium turned into a discount against GBTC’s net asset value (NAV). This trend continued until GBTC began public trading in January 2024. By December 2022, the discount had deepened to over 48% against GBTC’s NAV. The fluctuations between premiums and discounts had a significant impact on investors.
When GBTC became public, a large amount of capital had already been withdrawn from the fund. Additionally, the bankruptcy of Genesis led to the sale of enough GBTC shares to acquire 32,041 bitcoins. The end of Blackrock’s IBIT’s 71-day inflow streak coincided with Bloomberg ETF analyst Eric Balchunas mentioning GBTC’s 72-day record. Balchunas pointed out that no other ETF had ever achieved such a feat. The streak eventually concluded after 78 trading days with the $63 million inflow on Friday. This means that GBTC’s holdings will increase by approximately 1,030 bitcoins, bringing its balance sheet to an estimated 292,000 bitcoins worth $18.4 billion. Balchunas expressed surprise at Friday’s inflow, exclaiming, “Holy crap GBTC had inflows today. Their 80-day-ish streak is finally over. I had to rub my eyes and double-check the data, but it’s true.”
On Friday, all US spot bitcoin ETFs experienced inflows, with a total of $378.30 million being invested in the collective group. These ETFs had a total trading volume of $1.78 billion during the trading session. Blackrock’s IBIT led in trading volume with around $922.81 million, followed by Fidelity’s FBTC with $362.19 million.
What are your thoughts on GBTC’s first day of inflows? Feel free to share your opinions in the comments section below.
