Outflows from GBTC cause Bitcoin price to fall
Outflows from GBTC cause Bitcoin price to fall
The price of Bitcoin is down more than 3%, driven by a sharp increase in outflows from Grayscale Bitcoin Trust (GBTC).
At the time of writing, Bitcoin is trading at $61,620, down 3.2% from its February 29 high of $63,585.
According to Farside Investor, the Grayscale Bitcoin Trust (GBTC) saw net outflows of $598.9 million on February 29, the second-highest outflow from the fund since the spot Bitcoin ETF launched on January 11, 2024.
The record ETF net outflow for GBTC was $640.5 million on January 22, 2024. The second largest outflow came just days after GBTC recorded its lowest daily net outflow of $22.4 million on February 26, Cointelegraph reported.
Bloomberg analyst Eric Balchunas wrote on his X (Twitter) account: "That's a lot."
"Two steps forward, one step back," Balchunas commented on the outflow of funds from GBTC.
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Earlier on Feb. 28, ten spot Bitcoin ETFs in the US saw total net inflows of $673.4 million, a record high. It's worth noting that this came as Bitcoin hit a more than two-year high of $64,000.
The halving (reduction of miners' reward per block from 6.25 BTC to 3.125 BTC) is another event that supports the bullish rally of the largest cryptocurrency by capitalization.
However, analysts at JPMorgan warn that the price of BTC could fall after the euphoria surrounding the upcoming halving, which is expected to take place in April this year, comes to an end.
The halving, which historically drives the price of Bitcoin higher, could have the opposite effect and contribute to the BTC exchange rate collapsing to $42,000. This level will be determined by the cost of mining after the halving, and the price will gravitate towards it, analysts stressed.
This price assumes that smaller miners with less efficient machines will shut down their facilities due to high operating costs. However, the analysts noted that this may not happen, as inefficient mining rigs can only remain profitable if the Bitcoin price remains high, especially due to demand from Bitcoin ETFs.
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