Outflow of GBTC Funds Approaching Depletion

The Grayscale Bitcoin Trust is experiencing its lowest daily outflows since its inception, fueling optimism that this marks the initiation of the exodus's conclusion.

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Outflows from Grayscale’s Bitcoin Trust (GBTC) have displayed a consecutive two-day deceleration, sparking a glimmer of optimism that the potential multibillion-dollar Bitcoin selloff may be nearing its conclusion. According to BitMEX Research data, GBTC outflows on Jan. 24 amounted to $429 million, marking the smallest daily outflow since the launch of Grayscale’s spot Bitcoin ETF on Jan. 11 and representing a 33% slowdown compared to the beginning of the week on Jan. 22.

Bloomberg ETF analyst Eric Balchunas, in a Jan. 25 post, observed that GBTC outflows appear to be “seemingly trending down,” although he acknowledged that it still constitutes a substantial figure. Balchunas, in earlier analyses, had emphasized the presence of “too many unknowns” to accurately predict when the anticipated “mass exodus” from GBTC would cease.

Over nine trading days, GBTC has witnessed an outflow of 106,092 BTC, equivalent to approximately $4.4 billion. Despite the slowdown in daily outflows, it is essential to note that this does not definitively signal the conclusion or deceleration of the GBTC “bleeding.” Balchunas had previously estimated that GBTC would need to shed around 25% of its outstanding shares before a cessation of outflows could be anticipated.

Related: Bitwise Takes Lead as First US Bitcoin ETF to Publicly Share Wallet Address

Arkham Intelligence, a blockchain tracking firm, has cautioned against potential misinterpretation of GBTC outflow data displayed on its platform. In a post on Jan. 24, Arkham clarified that the outflow data for GBTC on its platform is divided between Coinbase Prime and new GBTC custody addresses. This implies that not all BTC moved from Grayscale’s Bitcoin Trust is necessarily being redeemed.

The explanation provided by Arkham highlighted the intricacies of Bitcoin transaction outputs due to the input-output structure of its blockchain. It pointed out that Bitcoin transaction outputs are often distributed among multiple addresses. Furthermore, Arkham noted that GBTC custody wallets frequently send funds to multiple addresses, resulting in some of the BTC sent in a transaction going to an address different from the main recipient shown in the transaction panel.

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