Bitcoin ETF had a single-day net outflow on March 19. Why is ETF "water pipe" so important?

24-03-20 17:37

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Original title: "Bitcoin ETF had a single-day net outflow on 3.19. Why is ETF's water pipe so important?" 》

Original author: 0xTodd, Partner of Nothing Research Fund

How to check the net inflow of Bitcoin $BTC spot ETF/ Outflow data?

[Don’t ask for help series]

1. Farside data: https: //farside.co.uk/?p=997

2.The Block data: https://theblock.co/data/crypto-markets/bitcoin -etf/spot-bitcoin-etf-flows

Q: Why should you care about knowing the inflow and outflow of Bitcoin ETF?

A: Bitcoin’s spot ETF is the most important conduit for US stock funds to Crypto. As long as there is no major trend reversal in this water pipe, Bitcoin's performance will not be too bad.

Q: Really? How much money does the ETF pipeline bring?

A: BlackRock and Fidelity are currently leading the way, and 10 ETFs (excluding Grayscale) have purchased more than 500,000 bits in total. Coins have brought more than 30 billion US dollars inflows to the industry, and you have to know that these are all real money.

Data source: https://coinglass.com/bitcoin-etf

Q: Why emphasize "net" inflow?

A: Because Grayscale $GBTC investors continue to redeem BTC, that is, "outflow". Including GBTC outflows, net inflows into the 11 ETFs still exceeded $12 billion.

Q: Have many ETFs begun to outflow? A: Basically only grayscale is constantly flowing out.

Some data:

Before the ETF was approved, Grayscale "Small ETF" has accumulated 600,000+ Bitcoins;

More than two months after ETF approval, Grayscale still has 380,000 Bitcoins left.

Q: Grayscale is the main contributor to the ETF approval, why does it keep flowing out?

A: Two reasons.

(1) Migration requirements: Grayscale’s management fee is very expensive, and the annual management fee is 1.5%. Other institutions generally charge 0.2%-0.25%, and some even waive the fee.

(2) Exit demand: Grayscale was established very early, $GBTC invested For example, the average opening of a position is about $27.8 (from: webull), and the current price is $57.4, which has doubled.

Large investors in $GBTC include the bankrupt 3AC and FTX, which The motivation for shipment is very strong.

As for BlackRock’s $iBTC, the average cost is probably around $30, but now it is only $36, so there is relatively little incentive to exit.

Q: Why doesn’t Grayscale lower its fees?

Grayscale: There are plans to gradually reduce fees in the next few months.

Grayscale CEO’s defense: We have historical performance to prove that we dare to charge this fee. Other companies have no historical performance, so they naturally have to reduce fees and promote promotions.

PS1: This sophistry is a bit humorous. Setting aside the fact that GBTC and iBTC rose and fell simultaneously, Bitcoin’s K-line is the common “historical performance” of all ETFs.

PS2: This kind of vague rhetoric ≈ no plan, just take it step by step.

PS3: Mainly economic accounts. 1.5% to 0.25% is too much. Even if Grayscale’s share drops to 1/6, which means another 300,000 BTC will flow out, it will still make more money without reducing fees.

PS4: It’s a pity that investors are lazy. If it is already in the ETF, it is too lazy to take it out; if it is already taken out, it is too lazy to put it back. Therefore, many of the huge GBTC redemptions have "accidentally" turned into real selling pressure.

Q: How big is the selling pressure on GBTC?

A: On March 18, GBTC withdrawals broke the record, with a massive withdrawal of US$640 million in one day, causing one of the few incidents in the history of BTC ETF On the day of net outflow, the net outflow amount reached US$150 million.

This may also be an important reason for yesterday's sharp drop.

PS: Make a small comparison.

Now $BTC is mined 6.25 * 144 = 900 BTC every day; it will become 450 BTC after the halving in one month. In other words, the halving reduced the daily selling pressure by US$28 million.

Q: How many BTC does Grayscale have?

A: 380,000 pieces, disclosed on the official website. https://etfs.grayscale.com/gbtc

Q: So how was last night (March 19)?

A: Grayscale once again redeemed 440 million US dollars in BTC, while BlackRock was slightly weak, with only 75 million US dollars flowing in, resulting in 3 The outflow of US$100 million has expanded compared with yesterday.

Finally, pay attention to emotions and data. Treasures are often hidden in the moment of change.

Wishing everyone a smooth landing and a finger on the pulse.