Bitcoin climbed higher to end the week as investors took some comfort in the idea that outflows from the Grayscale Bitcoin ETF (GBTC) could be starting to taper off.
All Eyes On Grayscale’s Outflow
Bitcoin surged over 5%, reaching $41,828.37 as reported by Coin Metrics, contributing to a marginal weekly gain of less than 1%. Ether was up 2% Friday, trading at $2,270.92. It’s on pace, however, to post a nearly 9% decline for the week.
Thursday “registered one of the lowest days in net outflows from GBTC and the third consecutive day of declining outflows, which could indicate the beginning of a slowdown in redemptions,” Needham’s John Todaro said in a note.
Outflows Largely Behind Us
It comes as daily net outflows from United States spot Bitcoin exchange-traded funds (ETFs) hit a record high on its ninth day of trading.
“GBTC profit taking has largely happened already,” said the analysts headed by market strategy managing director Nikolaos Panigirtzoglou in… pic.twitter.com/Dbd8YVhZLC
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“While it has been difficult to quantify how much more should come out of GBTC, we believe two of the largest drivers of selling [– outflows driven by the FTX estate and arbitrage funds –] are nearly done,” he added.
On Thursday JPMorgan strategist Nikolaos Panigirtzoglou made a similar observation, saying “GBTC profit taking has largely happened already … this would imply that most of the downward pressure on bitcoin from that channel should be largely behind us.”
Sharp Decline Following U.S. Launch of Spot Bitcoin ETFs
Bitcoin dropped sharply at the beginning of the week, falling under $39,000 for the first time since early December in a widely expected correction following the approval and launch of spot bitcoin ETFs in the U.S.
The carnage earlier this week wasn’t as bad as some chart analysts had projected. Although charts indicate bitcoin’s long-term uptrend still holds, some analysts expected the cryptocurrency to fall to as low as $36,000. Bitcoin mining stocks have outperformed the cryptocurrency. Riot Platforms rose 6% Friday. It’s set to gain 9% this week, which would mark its first positive week in five. Marathon Digital is higher by 10% and on track for an 11% weekly gain.