Cryptocurrency

United

Bitcoin ETF

Bitcoin

Grayscale Bitcoin Trust

<p>Cryptocurrency outflows in Europe and Canada have been influenced by the recent price slump in the market, primarily driven by substantial outflows from the Grayscale Bitcoin Trust (<a href="https://www.cryptopolitan.com/gbtc-as-outflows-slow-according-to-jpmorgan/" rel="noopener noreferrer nofollow">GBTC</a>) in the United States.&nbsp;</p>
<p>According to a report by CoinShares, the outflows from GBTC, totaling a significant $5 billion, have likely led to further outflows in other regions, particularly impacting digital asset investment products in Switzerland, Germany, Canada, and Sweden.</p>
<h2 class="wp-block-heading" id="crypto-outflows-in-europe-and-canada">Crypto outflows in Europe and Canada</h2>
<p>During the trading week from January 22 to January 26, digital asset products in Switzerland and Germany experienced notable outflows of $59.8 million and $31.7 million, respectively. However, the situation was more severe in Canada, where digital asset products recorded the largest outflows over the month, totaling $209.8 million.&nbsp;</p>
<p>Germany and Sweden followed closely with outflows of $124.5 million and $34.2 million, respectively. On a positive note, digital asset products in Brazil saw inflows of $10.3 million, serving as a rare exception amid the widespread outflows.</p>
<h2 class="wp-block-heading" id="impact-of-spot-bitcoin-etf-trading-in-the-u-s">Impact of spot Bitcoin ETF trading in the U.S.</h2>
<p>CoinShares also <a href="https://a.storyblok.com/f/155294/x/1dd9ce5803/coinshares-digital-asset-fund-flows-29-01-2024.pdf" rel="noopener noreferrer nofollow" target="_blank">noted</a> the impact of the second full week of spot Bitcoin ETF trading in the United States, contributing to a significant outflow of nearly $500 million. While nine “new” spot Bitcoin ETFs attracted approximately $1.8 billion in inflows, this influx was insufficient to offset the outflows from Grayscale’s converted spot Bitcoin ETF, GBTC, which witnessed over $2.2 billion during the week.</p>
<p>For several years, GBTC had been a profitable investment vehicle for those who borrowed money to enter the fund and took advantage of the Grayscale premium. The premium reached 43% in July 2019, creating opportunities for investors.&nbsp;</p>
<p>However, this arbitrage trade began to unravel when the premium abruptly turned into a discount in February 2021. Due to the minimum six-month lock-up period imposed on GBTC shares, many investors were trapped in the fund, hesitant to sell their shares at a continually worsening discount.</p>
<p>With the conversion of GBTC to a spot Bitcoin ETF, the discount has decreased from 1.55% to 0% as of January 26, according to YChart’s. While GBTC has seen $5 billion in outflows this month, it’s noteworthy that the newly issued spot Bitcoin ETFs have collectively attracted $5.94 billion in inflows since they began trading on January 11.</p>

Crypto outflows triggered by GBTC impact on European and Canadian digital asset products

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