{"id":88924,"date":"2023-11-26T05:27:43","date_gmt":"2023-11-26T10:27:43","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/gbtc-could-see-2-7-billion-outflow-upon-etf-conversion\/"},"modified":"2023-11-26T05:27:45","modified_gmt":"2023-11-26T10:27:45","slug":"gbtc-could-see-2-7-billion-outflow-upon-etf-conversion","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=88924","title":{"rendered":"GBTC Could See $2.7 Billion Outflow Upon ETF Conversion"},"content":{"rendered":"<div>\n<figure id=\"attachment_136075\" aria-describedby=\"caption-attachment-136075\" style=\"width: 1280px\" class=\"wp-caption aligncenter\"><noscript><\/noscript><figcaption id=\"caption-attachment-136075\" class=\"wp-caption-text\">Source: Pixabay \/ petre_barlea<\/figcaption><\/figure>\n<p>JPMorgan analysts have reported that the Grayscale Bitcoin Trust (GBTC) could experience outflows of at least $2.7 billion if it is converted into a spot Bitcoin exchange-traded fund (ETF).<\/p>\n<p>The report from JPMorgan suggests that traders have been buying GBTC shares at a discount, likely aiming to profit by cashing out the holdings if the trust converts to an ETF and the share price rises to match its Bitcoin assets.<\/p>\n<h2>JPMorgan\u2019s Report on GBTC\u2019s Potential Outflow<\/h2>\n<p><span class=\"replacer\"><\/span><br \/>After the calculation of the GBTC inflows since 2023, the analysts came to the conclusion that the Grayscale Bitcoin Trust to ETF conversion could result in outflows upwards of $2.7 billion as investors sell off shares.<\/p>\n<p>The JPMorgan analysts team, led by Global Market Strategy Managing Director Nikolaos Panigirtzoglou, explained their methodology, stating, \u201cTo proxy the buying flow into [the Grayscale Bitcoin Trust] since the beginning of the year, we cumulate the daily signed dollar volume, i.e., the daily volume in thousands of shares times the price times the sign of the price change, positive if the price had increased over that day and negative if the price had decreased.\u201d<\/p>\n<p>\u201cThis methodology produces an estimate of around $2.5 billion for the net cumulative flow into [the Grayscale Bitcoin Trust] since the beginning of the year. This number increases to close to $2.7 billion if one also adds the covering of the short interest since the beginning of the year,\u201d said the analysts.<\/p>\n<p>In addition, the analysts\u2019 estimated $2.7 billion is the bare minimum outflow, and it could be \u201csignificantly more\u201d unless GBTC\u2019s current fee of 200 basis points is lowered to around 50 basis points.<\/p>\n<p>\u201cOnce the SEC approves spot bitcoin ETFs in the U.S., we envisage a more intense competition with the average fee for bitcoin ETFs converging towards that of Gold ETFs, which currently stands at around 50 basis points,\u201d said the JPMorgan analysts.<\/p>\n<figure id=\"attachment_136077\" aria-describedby=\"caption-attachment-136077\" style=\"width: 872px\" class=\"wp-caption aligncenter\"><noscript><\/noscript><figcaption id=\"caption-attachment-136077\" class=\"wp-caption-text\">Source: Yahoo Finance<\/figcaption><\/figure>\n<p>GBTC is currently trading at $30.45, up by 27% from a month ago, according to Yahoo Finance.<\/p>\n<h2>Incoming Competition of Management Fees<\/h2>\n<p><span class=\"replacer\"><\/span><br \/>To give some context, Cathie Wood\u2019s ARK Investment Management and 21Shares recently filed an update for their spot Bitcoin ETF application (ARKB), adjusting the management fee from 70 basis points to 80.<\/p>\n<p>Bloomberg Intelligence ETF Analyst James Seyffart initially assumed that the fee of ARKB would be lower and \u201ccloser to 50 basis points,\u201d which would be around the average of 54 basis points (0.54%) across US-listed ETFs.<\/p>\n<p>\u201cAlso the fact that Ark and 21Shares have updated their filing from a 70 basis point fee to 80 basis points might mean that running these products is going to cost even more than some sponsors and issuers thought it would,\u201d said Seyffart.<\/p>\n<div class=\"newsletter home-newsletter single\">\n<div class=\"left-side\">\n<p>\n        <em><br \/>\n            Enter your email for our Free Daily Newsletter        <\/em>\n    <\/p>\n<p> A quick 3min read about today&#8217;s crypto news!<\/p>\n<p>    <span class=\"response-msg\" id=\"newsletter-response\"><\/span>\n<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>Read the full article <a href=\"https:\/\/cryptonews.com\/news\/gbtc-could-see-2-7-billion-outflow-upon-etf-conversion-jpmorgan-analysts-say.htm\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: Pixabay \/ petre_barlea JPMorgan analysts have reported that the Grayscale Bitcoin Trust (GBTC) could experience outflows of at least $2.7 billion if it is converted into a spot Bitcoin exchange-traded fund (ETF). The report from JPMorgan suggests that traders have been buying GBTC shares at a discount, likely aiming to profit by cashing out [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":88925,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[243],"tags":[83],"class_list":["post-88924","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto","tag-featured"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>GBTC Could See $2.7 Billion Outflow Upon ETF Conversion | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Source: Pixabay \/ petre_barlea JPMorgan analysts have reported that the Grayscale Bitcoin Trust (GBTC) could experience outflows of at least $2.7 billion\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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