The Gameplan
The GBTC Problem
We have been watching spot BTC ETF flows closely since their launch two weeks ago, and while overall net flows remain decidedly positive, the market seems hung up on GBTC outflows. As a reminder, the outflows we care the most about are those from entities that are not rotating into other spot BTC ETFs. This is comprised of some speculative capital that played the run-up into ETF approval as well as sales from bankrupt entities, such as FTX.
While it is difficult to ascertain an exact amount of hidden GBTC available for sale, there are some optimistic data points that we can consider:
- It is likely that all speculative capital has exited. This would have occurred within the first day or two post-launch.
- There is confirmation from reliable sources that the FTX estate has already liquidated all its GBTC holdings as of earlier this week.
- We are starting to see a pattern of decreasing redemptions from GBTC. We will certainly need to see a few more days of follow-through, but a mere slowing down of this AUM exodus would serve as a large boost for the market.
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