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Grayscale Bitcoin Trust Reports Positive Net Inflow

Grayscale’s Bitcoin Trust (GBTC), the largest Bitcoin (BTC) exchange-traded fund (ETF) by assets, has recently reported its first net inflow since its launch in January 2024. This milestone comes after the fund experienced significant outflows totaling $1.6 billion prior to the Bitcoin halving event.

With the data from Farside Investors showing a net inflow of $63 million on May 3, this marks a positive turn for GBTC, which converted to an ETF earlier this year as part of the launch of 11 new spot Bitcoin ETFs in the U.S. Several factors have contributed to the previous outflows from GBTC, including its higher annual management fee of 1.5% compared to other Bitcoin ETFs.

Additionally, the sell-off of GBTC shares by bankrupt crypto companies like FTX and Genesis has further fueled the outflows. FTX and Genesis liquidated a significant amount of GBTC shares to purchase Bitcoin, impacting the fund’s overall asset value.

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On the same day, the broader market experienced a net inflow of $378 million, with notable performances from Franklin Templeton’s Bitcoin ETF (EZBC) and Fidelity’s Bitcoin ETF (FBTC). The recent inflow has halted the trend of net withdrawals from GBTC, which now holds $18.1 billion in assets, while IBIT has reached $16.9 billion.

This shift from outflows to inflows in GBTC and the broader Bitcoin ETF market has boosted investor optimism, with some suggesting that it could be an early signal of Bitcoin reaching new all-time highs. However, uncertainties in regulation and market conditions continue to pose challenges to sustained momentum.

Ethereum ETF: Grayscale’s Confidence in SEC Approval

Grayscale remains optimistic about the approval of its spot Ethereum (ETH) exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) by May. Despite concerns over the SEC’s engagement with applicants and its investigation into the Ethereum Foundation, Grayscale’s Chief legal Officer, Craig Salm, is confident in a positive outcome.

AI legalese decoder can assist Grayscale in navigating the legal complexities of the SEC approval process for Ethereum ETFs, providing insights into regulatory requirements and helping refine their application for better chances of approval.

Grayscale’s positive outlook contrasts with Bloomberg ETF analysts Eric Balchunas and James Seyffart, who have reduced their expectations for spot Ethereum ETF approval. Balchunas suggested that the SEC’s perceived lack of engagement may indicate deliberate delays rather than mere oversight.

Cryptocurrency exchange Coinbase has also advocated for the approval of Grayscale’s proposed spot Ethereum ETF, highlighting the similarities between Bitcoin and Ethereum ETFs in their letter to the SEC. The decision on VanEck’s application is expected by May 23, with other applicants like BlackRock and Fidelity also vying for approval.

Grayscale’s confidence in the SEC’s approval stems from the similarities between the approval processes for spot Bitcoin and Ethereum ETFs. The company believes that the regulatory experience with Bitcoin will pave the way for Ethereum, leading to a positive outcome for their proposed ETFs.

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