10 Questions and Answers about Bitcoin ETFs: Why is it so important to monitor ETF plumbing?
Original author: 0xTodd (X: @0x_Todd)
Editors note: Why should we care about the inflows and outflows of Bitcoin ETFs? Grayscale is the main contributor to the ETF approval, why does it keep flowing out? Crypto KOL 0x Todd (X: @0x_Todd) briefly summarized some key points about Bitcoin spot ETF. Odaily organizes it as follows:
Q: How to check the net inflow/outflow data of Bitcoin $BTC spot ETF?
Farside data:https://farside.co.uk/?p=997
The Block data:https://theblock.co/data/crypto-markets/bitcoin-etf/spot-bitcoin-etf-flows
Q: Why should we care about the inflow and outflow of Bitcoin ETF?
A：Bitcoin spot ETF is the most important channel for US stock funds to Crypto. As long as there is no major trend reversal in this water pipe, Bitcoins performance will not be too bad.
Q: Really? How much money does the ETF pipeline bring?
A：At present, BlackRock and Fidelity are leading the way. 10 ETFs (excluding Grayscale) have purchased more than 500,000 Bitcoins, bringing more than 30 billion U.S. dollars inflows to the industry, and you have to know that these are all real money. .
Data Sources:https://coinglass.com/bitcoin-etf
Q: Why emphasize “net” inflow?
A：Because Grayscale $GBTC investors continue to redeem BTC, that is, outflow. Including GBTC outflows, the net inflows of 11 ETFs still exceeded US$12 billion.
Q: Have many ETFs begun to flow out?
A：Basically only grayscale is flowing out.
some data:
Before the ETF was approved, Grayscale’s “small ETF” had accumulated 60 w+ Bitcoins;
More than two months after the ETF was approved, Grayscale still has 38w Bitcoins left.
Q: Grayscale is the hero of ETF approval. Why does it keep flowing out?
A：Two reasons.
(1) Migration requirements: Grayscale’s management fee is very expensive, and the annual management fee is 1.5%. Other institutions generally charge 0.2% -0.25%, and some even waive the fee.
(2) Exit demand: Grayscale was established very early. $GBTC investors opened an average position of about $27.8 (from: webull). The current price is $57.4, which has doubled.
Large investors in $GBTC include the bankrupt 3AC and FTX, which have strong motivation to ship.
As for BlackRocks $iBTC, the average cost is probably around $30, but now its only $36, so there is relatively little incentive to exit.
Q: Why doesn’t Grayscale lower its fees?
Grayscale: There are plans to gradually reduce fees in the next few months.
Grayscale CEO’s defense: We have the historical performance to prove that we dare to charge this fee. Other companies have no historical performance, so they naturally have to reduce fees and promote promotions.
PS 1: This sophistry is a bit humorous. Setting aside the fact that GBTC and iBTC both rose and fell at the same time, Bitcoins K-line is the common historical performance of all ETFs.
PS 2: This kind of vague rhetoric ≈ no plan, just take it step by step.
PS 3: Mainly economic accounts. 1.5% to 0.25% is too much. Even if Grayscale’s share drops to 1/6, which means another 300,000 BTC will flow out, it will still make more money without reducing fees.
PS 4: It’s a pity that investors are lazy. If it is already in the ETF, it is too lazy to take it out; if it is already taken out, it is too lazy to put it back. Therefore, many of the huge GBTC redemptions accidentally turned into real selling pressure.
Q: How big is the selling pressure on GBTC?
A：On March 18, GBTC withdrawals broke the record, with US$640 million withdrawn in one day, resulting in one of the few net outflow days in the history of BTC ETF, with the net outflow amount reaching US$150 million.
This may also be an important reason for yesterdays sharp drop.
PS: Make a small comparison.
Now $BTC is mining 6.25 * 144 = 900 BTC every day; it will become 450 BTC after the halving in one month. In other words, the halving reduced the daily selling pressure by US$2,800.
Q: How many BTC does Grayscale have?
A：38 w pieces, as disclosed on the official website.https://etfs.grayscale.com/gbtc
Q: So how was last night (March 19)?
A：Grayscale once again redeemed US$440 million in BTC, while BlackRock was slightly weak, with only an inflow of US$7,500, resulting in an outflow of US$300 million, which was larger than yesterday.
Finally, pay attention to emotions and data. Treasures are often hidden in the moment of change.
Wishing you all a smooth landing and a finger on the pulse.
