Bitcoin ETF Inflows

Bitcoin and ETF

The launch of the Bitcoin spot ETF will go down in history. It surpassed the previous record set by the Proshares Bitcoin Strategy ETF (BITO) launch in October 2021, according to all sources, being the largest ETF product launch in history. $4.6 billion was traded on its first day, and compared to other products' usual post-launch falls, it has stayed relatively strong. Unlike the inflows, we can be sure of the volume figures. Due to insufficient and delayed data provided by TradFi, the market was left in the dark about flows beyond the first two days of trading. Experts like Bloomberg's Eric Balchunas stated that delays in flow reporting of up to T+3 (three days later) were typical.

The table below shows that the GBTC outflows have reached over $2 billion, with Day 3 being the biggest day. But it's very likely that Day 2's trade on Day 1 contributed to the majority of Day 3's flows, and so on. Additionally, we are unable to determine whether the data of each issuer is current. Are they done counting or are those all of their flows? We are merely ignorant.
By tracking flows on-chain, bitcoiners are augmenting the slow TradFi data, which can take days. James Van Straten of Cryptoslate revealed on Wednesday morning that 18,400 bitcoin were transferred from Grayscale to Coinbase's Prime OTC desk immediately at the start of trading. This was in line with two prior trading days' outflows of 4,000 and 9,000 bitcoin on January 12 and 16, respectively. Although the on-chain data from Arkham, an intelligence firm, is reliable, there is an issue with it not matching the outflows that are reported. The total value of bitcoin in that three days' worth of on-chain data is $1.3 billion, but the reported outflows were just $1.1 billion. Interestingly, on January 18, there were no transactions in the morning till this morning.
Since Coinbase already holds Grayscale's bitcoin, the impact on the spot price will be minimal because the bitcoin is being transferred from Coinbase's custody account to the OTC desk, where it can be picked up by other ETF market makers.

GBTC Sales May Be Coming to an End

Although grayscale sales were anticipated, the exact quantity that will be sold by the time the dust settles is yet unknown. Will all of their coins gradually emerge, or maybe only 10%? People are thinking that the 1.5% expense ratio compared to the other ETFs' average 0.25% may lead to ETF swapping. That would not result in any net selling if that were the case. When they transitioned, GBTC did reduce their fee from 2% to the new 1.5%. GBTC holders may decide to stick onto their investments until the next upswing if they have sizable unrealized gains. Recall that switching has tax ramifications as well.

Bitcoin Price

In terms of price, despite significant withdrawals from GBTC and whale selling, bitcoin has been able to maintain its support level of $40,000. Once more, according to James Van Straten, a whale may have unloaded 100,000 BTC with an offer of $49,000. The whale purchased at $48,000 during the bull market of 2021 and held through the significant decline and the FTX fiasco. To put things in perspective, all of the ETFs that were previously part of GBTC are still below that, at 79,000 BTC. This could have just been a whale selling after breaking even; it was not a sell-the-news incident. This means that there is only a week or so's delay in the steady buying pressure of the ETFs.
Although we are currently in the range that extends back to the beginning of December, we are in danger of dropping below it. My focus is still on $40,000 and the $44,193 line that we have been observing since December 8 due to its creation from the high daily close.

The monthly Ichimoku cloud is extremely optimistic for readers who have a gorgeous low time preference. This is a very positive indication that appears only at the start of bitcoin bull runs. After nearly flipping before COVID in February 2020, it finally happened in October 2020. It's interesting to note that the current ratio would have been almost exactly the same if the coin had flipped in February. The only other time this has happened before 2020 was in June 2016, right before the July 2016 halving, and right at the start of that enormous bull market.

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