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Grayscale’s GBTC Sees First Inflows Since Launch, Ending Outflows Trend
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Grayscale Investments’ GBTC saw its first day of inflows, following more than $17.5 billion in outflows since the Bitcoin ETFs launched in January. Grayscale Investments has achieved its first day of positive net inflows for the Grayscale Bitcoin Trust (GBTC). This comes after nearly four months of continuous outflows since its conversion to a Bitcoin exchange-traded fund (ETF) in January. Grayscale’s GBTC saw inflows of $63 million on May 3, after seeing outflows of about $17.5 billion since launching its 11 spot Bitcoin ETFs on Jan. 11, according to preliminary data from Farside.
The crypto community has been speculating on how the turn of events could impact Bitcoin’s $63,062 BTC price. Pseudonymous cryptocurrency investor DivXman told his followers that GBTC was the “primary source” of selling pressure on all spot Bitcoin ETFs, but “the tides” may be changing. Cryptocurrency trader Jelle predicted to his 80,300X followers on the same day that Bitcoin’s new all-time high was on the horizon.
Several factors have contributed to Grayscale’s continued outflows since the launch of 11 spot Bitcoin ETFs. One reason is GBTC’s high fees compared to other available ETFs. GBTC’s fee is set at 1.5%, while fees for other ETFs are all less than 1%. The cheapest is currently Franklin Templeton with a commission of 0.19%. Another main driver is the bankruptcy of cryptocurrency companies FTX and Genesis which sell large amounts of GBTC actions in an attempt to repay creditors. On April 6, Genesis liquidated about 36 million GBTC shares for $2.1 billion to buy 32,041 Bitcoin, Cointelegraph reported.
Acquired crypto tokens worth over $3 billion will be unlocked in May
Acquired crypto assets worth over $3.1 billion will be released in May, with projects like Sui and Pyth Network unlocking over $1 billion in tokens each. Cryptocurrency vesting is done to promote continued dedication to a crypto project. Acquired crypto tokens are locked to prevent early investors or team members from hastily dumping their tokens and abandoning the project. Among the projects releasing acquired crypto assets, Tier 1 blockchain platform Sui will release the largest amount.
With the Pyth Network token (PYTH) trading at around $0.51 a piece, the tokens that will be released are worth around $1.1 billion. In addition to the two, projects such as Avalanche AVAX $35.49, Aptos APT $9.11, Arbitrum (ARB), Starknet (STRK), Optimism (OP), and Immutable (IMX) will collectively release over $700 million in tokens. On May 12, Aptos will release 11.3 million APT tokens worth $101 million to its foundation, community, core contributors, and investors. On May 22, Avalanche will unlock 9.5 million AVAX, valued at approximately $321 million, for its strategic partners, foundation, team and airdrop.
Layer-2 blockchain network Arbitrum will release another $95 million in ARB tokens on May 16. Tokens will be allocated to the project team and investors. On March 16, Arbitrum released $2.3 billion worth of tokens to its team and investors. Additionally, Starknet will unlock $84 million in tokens for its investors and early contributors on May 15, while Immutable will unlock $56 million in crypto tokens for ecosystem and project development on May 17. The Layer-2 Optimism scaling solution will also unlock 24.1 million OP tokens on May 29. The tokens are worth around $70 million at current market prices.
SEC Delays Decision on 7RCC Eco-Friendly Bitcoin Spot ETF
The US Securities and Exchange Commission has extended the review period on the listing of 7RCC’s zero-carbon Bitcoin exchange traded fund (ETF). According to a May 2 notice, the commission will now finalize its approval or disapproval of NYSE Arca’s application by June 24. The first deadline was set for May 10th. The fund is designed to expose investors to Bitcoin BTC $63,007 alongside carbon credits, mitigating the digital asset’s carbon footprint.
The ETF plans to allocate 80% of its assets to Bitcoin and the remaining 20% to financial instruments, such as swaps, linked to carbon credit futures contracts related to emissions allowances. According to 7RCC’s statement, carbon credits are associated with the European Union’s Emissions Trading System, the California Carbon Guarantee and the Regional Greenhouse Gas Initiative. Carbon credit futures are financial derivatives that allow trading based on the expected future value of carbon credits.
Since January, the Commission has approved 11 spot Bitcoin ETFs. These ETFs allow direct investments in Bitcoin rather than through derivatives such as futures, providing exposure to Bitcoin market movements through a regulated investment product. The next focus of investment managers is options trading on spot Bitcoin ETFs. Since January, the Commission has been delaying its decision on requests submitted by the New York Stock Exchange, Nasdaq and Cboe Global Markets.