JPMorgan analysts have suggested that investors have likely completed most of their profit-taking from the Grayscale Bitcoin Trust (GBTC), potentially alleviating downward pressure on Bitcoin’s price.
This observation coincides with record high daily net outflows from United States spot Bitcoin exchange-traded funds (ETFs) on their ninth day of trading.
In a market report dated January 25, the analysts, led by Market Strategy Managing Director Nikolaos Panigirtzoglou, stated that “GBTC profit taking has largely happened already.”
This implies that much of the negative influence on Bitcoin stemming from this source has subsided.
Grayscale’s fund had been trading at a discount to its net asset value since early 2021.
The analysts attributed the $4.3 billion outflows from the fund since its conversion to an ETF on January 11 to “profit-taking on previous GBTC investments.”
This profit-taking is seen as one of the key reasons behind Bitcoin’s recent price drop of nearly 20%, causing it to trade below $40,000 following the launch of multiple U.S. Bitcoin ETFs.
JPMorgan’s assessment follows a significant event where the ten approved spot Bitcoin ETFs experienced a net outflow of $158 million on January 24.
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This marked the largest net outflow since their launch, as per BitMEX research data shared on social media platform X on January 25.
Grayscale’s ETF witnessed $429 million in outflows on January 24, while the most recent data from BitMEX for January 25 indicated a decrease to $394 million – the second-lowest outflow on record.
Data for January 24, compiled by X account CC15Capital, revealed that Bitcoin ETF holdings held by all ten funds declined by 4,610 BTC, valued at nearly $184 million.
In their note, JPMorgan analysts also highlighted the emergence of BlackRock and Fidelity’s spot Bitcoin ETFs as competitors to GBTC.
These ETFs have accumulated assets under management of $1.9 billion and $1.8 billion, respectively.
On January 24, BlackRock’s spot Bitcoin ETF experienced the lowest inflow since its launch, attracting only $66.2 million.
Despite this, it increased its Bitcoin holdings by 1,663 BTC, bringing its total to nearly 45,700 BTC.
In conclusion, JPMorgan analysts believe that the bulk of profit-taking from GBTC is likely over, potentially relieving the downward pressure on Bitcoin’s price.
However, they acknowledge the emergence of strong competitors in the form of BlackRock and Fidelity’s Bitcoin ETFs.
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