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Momentum Shifts in Bitcoin Market as Institutional Outflows Slow and Optimism Grows for Future Highs

In recent developments, Bitcoin may be witnessing a shift in momentum as institutional outflows diminish.

According to data from the UK-based investment firm Farside, the Grayscale Bitcoin Trust (GBTC) experienced a modest reduction of $170 million on March 22.

This comes amid discussions surrounding the United States Spot Bitcoin exchange-traded funds (ETFs), which have faced challenges, including decreased inflows and record-high outflows from GBTC, signaling a potential consolidation phase before Bitcoin tests its all-time high again.

Notably, the series of GBTC outflows coincided with reports of the bankrupt crypto lender Genesis liquidating its GBTC holdings.

This sell-off could be nearing its end, potentially easing the downward trends observed in ETFs.

Investor Alistair Milne highlighted a significant slowdown in GBTC selling, leading to a decrease in net outflows from Bitcoin ETFs to -$51.6 million. Milne’s observation raises the possibility of a momentum shift in the market.

Supporting this perspective, statistician Willy Woo introduced a new model that correlates ETF inflows with Bitcoin’s price movements, suggesting the most intense selling phase might have concluded.

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Woo anticipates continued market choppiness leading up to the Bitcoin halving event, echoing a sentiment for potential consolidation.

Echoing optimism, WhalePanda, a pseudonymous commentator, predicts a sideways market trend, potentially setting the stage for Bitcoin’s ascent to new all-time highs.

The commentator points to a significant demand for Bitcoin inflows to match the coin’s daily emission rate, which is expected to halve soon, further tightening supply.

However, GBTC faces criticism for its diminishing assets under management (AUM), now holding just half of its AUM since its ETF conversion.

Critics argue that GBTC’s reduction is beneficial for the Bitcoin ecosystem, with Vijay Boyapati blaming it for market instability and hindering Bitcoin’s growth.

Despite these challenges, spot Bitcoin ETFs have been historically successful, amassing $12.15 billion in cumulative flows.

Cathie Wood of ARK Invest anticipates more institutional engagement in the near future, signaling continued interest and investment in Bitcoin.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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