ETF FOCUS

U.S. Bitcoin ETFs Inflows Signal a Slow in GBTC’s Impact

GBTC Outflows: The Grayscale Bitcoin Trust (GBTC) reported an outflow of $192 million worth of bitcoin (BTC) on Monday, January 30.

Overall Market Surge: Contrasting sharply with GBTC's outflow, the broader Bitcoin ETF market experienced a net inflow of $255 million worth of BTC on the same day. This marks the largest single-day inflow since the fifth day of Bitcoin ETF trading, underlining a notable uptick in investor interest and/or changing market dynamics due to GBTC selling slowing down.

ETFs Stack: Bitcoin ETFs collectively added approximately 5,918 BTC to their portfolios yesterday.

Supply Shock: Contrast the 5,918 BTC umber against the daily production rate of new bitcoins, which is currently around 900 per day. The difference between the ETFs' acquisition rate—not to mention all other Bitcoin buying happening on other exchanges—and the upcoming halving points to a potential supply squeeze in the future.

Accumulation: As ETFs and exchanges aggressively accumulate more bitcoins than are being created, this could lead to an increasingly scarce supply, potentially impacting Bitcoin's price in a major way.

🇨🇳 Chinese investors are turning to Bitcoin as their economy declines. Despite a 2021 ban on Bitcoin, Chinese investors have creatively bypassed restrictions, especially through Hong Kong's more lenient environment, viewing crypto as safer than domestic stocks and properties.

🚀 Swan Bitcoin has launched a Bitcoin mining unit, Swan Mining. The Swan Mining operation has achieved 4.5 exahash per second (EH/s), and is aiming for 8 EH/s by March. Swan’s parent company plans to go public within the next 12 months.

🔍 U.S. government plans to sell 69,000 BTC seized from Silk Road. This sale follows a court-approved forfeiture of $130 million worth of Bitcoin from the notorious digital black market, Silk Road. This sale is part of resolving a case involving the total amount of 144,000 Bitcoins seized back in 2013.

🏛️ Bitcoin ETFs approval may significantly impact the 2024 elections. As politicians now run for office, they must now address Bitcoin's role in financial systems and regulatory frameworks, reflecting its mainstream adoption and influence on voter sentiment.

📉 BTC’s value dropped 19% due to $4.39 billion outflows from GBTC. Despite $824 million in net inflows since the approval of Bitcoin Spot ETFs, these outflows paradoxically signal a positive medium-term outlook for Bitcoin. The market is adapting to the significant GBTC sales and GBTC BTC hitting the market, including those from bankruptcy estates and traders who were locked into GBTC.

🔴 Bitcoin miners may face profitability concerns post-halving. Cantor Fitzgerald's analysis indicates that without a significant price increase in Bitcoin, 11 of the 13 leading publicly traded Bitcoin mining companies will become unprofitable after the next halving event.

Evergrande Crisis Triggers Market Shift

Evergrande's Liquidation: A Hong Kong court has ordered the liquidation of Evergrande, the debt-heavy Chinese property giant. This signals a major shakeup in China's real estate and financial sectors. A move like this reflects the severity of Evergrande's financial troubles and could destabilize the property market further.

Market Reaction and Bitcoin: Following the liquidation news, Evergrande's shares dropped over 20%, indicating market anxiety. This turmoil could lead investors to seek stability in assets like Bitcoin, given the uncertainties in traditional markets and China's significant global economic role.

Shift Towards Crypto: The uncertainty and potential market disruptions from Evergrande's situation might increase the attractiveness of decentralized assets like Bitcoin. Investors looking for stability might turn to BTC as traditional markets and real estate investments become more unpredictable, potentially driving a broader move towards crypto.

Once the GBTC sell-off finishes, will the Bitcoin price continue to go up before the halving?

👍 Yes - 79.2%

👎 No - 20.8%

👍 Yes - “This is a fixed supply asset, so when buyers have sucked up the rest of what's available from GBTC selling the price will naturally rise as demand increases, and that demand will likely snowball toward the halving.” - Tom

📰 Harvest Fund Management's Hong Kong arm applied for a spot Bitcoin ETF with the local regulator, aiming to launch Hong Kong's first Bitcoin ETF. Additionally, companies including Harvest are in talks with the Hong Kong Monetary Authority about potential stablecoin trials, indicating growing interest in Bitcoin ventures in the region.

📜 Senator Rand Paul reintroduces the "Audit the Fed" Bill in the U.S. Senate, aiming to increase transparency and oversight of the U.S. Federal Reserve. The bill proposes a full audit of the Fed's operations, criticizing its obscure actions and influence on economic issues like inflation and Americans' purchasing power.

📈 With $8 trillion in assets, Charles Schwab is expected to join the spot Bitcoin ETF market, following approvals for BlackRock, Fidelity, and Grayscale by the SEC. Schwab may introduce its own low-cost Bitcoin ETF, leveraging its loyal customer base to compete in the growing U.S. Bitcoin ETF market.

Robert F. Kennedy Jr., U.S. Presidential Candidate, labels CBDCs a threat to rights, endorsing Bitcoin for its inflation and fiat currency risk protection.

73% - The number of Europeans that are positive about the future of Bitcoin.

5 - The number of months in a row that Bitcoin has gone up. The most since 2021.

78 - The number of days left until the 2024 Bitcoin halving.