Bitcoin Spot ETF Fund Flow Analysis

The fund flows of Bitcoin Spot ETF are an important indicator for observing trends in the cryptocurrency market. As the main channel for US stock funds to enter the cryptocurrency space, the fund flows of ETFs significantly impact the market performance of Bitcoin.

Currently, aside from Grayscale, 10 ETFs have collectively purchased over 500,000 Bitcoins, bringing more than 30 billion USD in funds into the industry. This capital is a tangible investment, demonstrating institutional investors' confidence in Bitcoin. Even accounting for the ongoing redemptions of Grayscale's GBTC, the net inflow of the 11 ETFs still exceeds 12 billion USD.

Grayscale GBTC is the only ETF that has consistently experienced large-scale redemptions. There are mainly two reasons for this:

1. Fee Differences: Grayscale's annual management fee is as high as 1.5%, while other institutions generally range between 0.2% and 0.25%, with some even waiving fees.

2. Taking profits: The average entry price for GBTC investors is around $27.8, while the current price has doubled to about $57.4. Many early investors choose to exit at this time.

It is worth noting that among the large investors in GBTC are the bankrupt 3AC and FTX, which have a strong motivation to sell. In contrast, for other ETFs like BlackRock's iBTC, the average cost for investors is around $30, while the current price is only $36, resulting in a smaller motivation to exit.

Grayscale has indicated plans to gradually reduce fees over the coming months, although a specific timeline has not been clarified. From an economic perspective, even if Grayscale's shares drop to 1/6, maintaining high fees could still yield more revenue.

The large-scale redemptions of GBTC have put some pressure on the market. On March 18, the single-day redemption amount for GBTC reached as high as $640 million, resulting in a historically rare net outflow for the BTC ETF, amounting to $150 million. This could be one of the important reasons for the decline in Bitcoin prices.

Currently, Grayscale still holds about 380,000 Bitcoins. On March 19, Grayscale redeemed another $440 million worth of Bitcoin, while BlackRock only saw an inflow of $75 million, resulting in a net outflow of $300 million that day.

In comparison, the daily mining output of Bitcoin will decrease from the current 900 coins (worth approximately 28 million USD) to 450 coins after the halving. The redemption pressure of GBTC is significantly more pronounced in contrast.

Investors should closely monitor the changes in ETF capital flows, as this often reflects shifts in market sentiment and provides important references for seizing investment opportunities.