Dear investment partners, we need to discuss the fluctuations in capital flow of Grayscale Bitcoin Trust (GBTC) and Bitwise's BITB.
First, let's talk about GBTC. This guy surprisingly attracted 35.8 million USD yesterday, which is its first time doing so since its transition to a spot ETF! This could imply several things: first, risk aversion has risen; although the price of Bitcoin surged to a new high, it dropped back down (it reached 69,000 on March 5 but closed back at 63,000), and some people find GBTC quite reliable, with good liquidity for hedging risks; second, some want to buy the dip as the price has corrected, and they feel it's time to act, especially with a well-established brand like GBTC that people still trust; third, there are emerging divergences in the market; despite GBTC's higher fees (1.5%), institutional giants might think it's suitable for long-term allocation, unlike the short-term trading of retail investors.
Looking at BITB again, this guy saw a net outflow of 24 million USD yesterday. What's going on? It could be that some people made money and wanted to cash out. BITB has low fees (0.2%), which attracts short-term traders; moreover, funds are flowing into the larger ETFs, like BlackRock's IBIT and Fidelity's FBTC, which attracted 788 million and 204 million respectively in just one day, squeezing out the mid-sized ETFs.
Currently, the market is becoming increasingly fragmented, and the voices of institutional giants are growing louder. The two largest Bitcoin spot ETFs (IBIT and FBTC) have an overwhelming ability to attract funds, accounting for over 80% of capital inflows. This illustrates the principle of 'good shade under a big tree'. Although BITB has low fees, its scale is small (around 2 billion USD) and liquidity is poor; people still choose 'safety' during times of high volatility.
The macro environment is also concerning, with the Fed's interest rate cuts being delayed and tech stocks in the US market also correcting. These factors may prompt some to reconsider their Bitcoin allocations, and adjustments in positions are unavoidable in the short term.
Looking to the future, we need to keep an eye on whether the capital inflow into GBTC can be sustained. If it does, the market sentiment might change from 'disdain for Grayscale' to 'diverse balance'. The price of Bitcoin is expected to fluctuate in the short term; with such fragmented capital flows, market volatility may increase, and everyone needs to be cautious about the impact of ETF capital net inflows and outflows on coin prices.
In the medium to long term, when selecting ETFs, we must consider fees, liquidity, and the strength of the custodian. Institutional-grade options like IBIT and FBTC may be more suitable as core holdings.
In summary, the market is changing rapidly, and we must remain vigilant, invest rationally, and not let temporary fluctuations cloud our judgment!
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