Largest Bitcoin ETF Sees Slowing Outflows, Boosting Crypto Sentiment

• As outflows from the $20 billion Grayscale Bitcoin Trust slow, crypto sentiments have turned bullish, fueling Bitcoin’s climb back above $42,000.
• BTC recorded a significant plunge to reach just under $40,000 as GBTC recorded outflows of around $4.8 billion.

Since the approval and consequential conversion of the Grayscale Bitcoin Trust into an ETF, making it the largest Bitcoin ETF with $20 billion, the ETF has suffered record outflows. The latest data shows a record $4.8 billion has exited the decade-old Bitcoin portfolio. Selling pressure from this outflow led Bitcoin to plunge, dropping under $40,000 last week.

One of the most notable transactions is Cathie Woods’ Ark Invest divesting completely from Grayscale Bitcoin Trust (GBTC) in its ARKW portfolio, opting for a shift towards Bitcoin futures through ProShares’ Bitcoin Strategy ETF ($BITO).

Other ETF providers have enjoyed billions in inflows, with BlackRock leading. Experts have noted that this could be due to its high fees and the shrinking price difference with spot ETFs. JPMorgan Chase & Co. strategists, including Nikolaos Panigirtzoglou, wrote in a note:

Profit-taking on previous GBTC investments, made at a discount to net asset value last year, has likely been a major driver behind Bitcoin’s correction,

The analyst further notes that the sell-offs “should be largely behind us, limiting any downside for Bitcoin from here.” John Hoffman, managing director of sales and distribution at Grayscale Investments, had earlier stated that “GBTC’s diverse shareholder base will continue to deploy strategies that impact inflows and outflows.”

At the time of writing, BTC is trading at $42,425 after a 1.5% surge in the last 24 hours. These gains mark a turnaround in the weekly performance, with a 1% gain posted for the week. Following the pattern, it is likely that the cryptocurrency’s dominance will begin to climb back up after sliding to 48.6% from a high of a little over 50%.

As sentiments seemingly change, investors will be keen to see whether the crypto king can rally to reach its monthly high of $49,000. Further down the road, experts foresee BTC retesting its all-time high of $69,000 and going as high as over $100,000 by the end of the year. Standard Chartered Bank predicts that the Bitcoin price could reach $200,000 by the end of 2025. In a statement, the bank stated:

We expect bitcoin to enjoy price gains of a similar magnitude as a result of U.S. spot ETF approval, but we see these gains materializing over a shorter (one- to two-year) period, given our view that the BTC ETF market will develop more quickly,

In addition to the ETFs attracting billions of dollars and driving demand for the digital asset, the April halving could be a significant development for BTC. Historically, this has been one of the most bullish events that has led to the crypto king setting new all-time highs.