Fresh Reports Show Institutional Investors Lose Interest In Bitcoin

Fresh reports show that institutional investors are slowly losing interest in Bitcoin despite the Grayscale BTC trust continues to trade at a discount and the money is flowing out of BTC ETFs as we can see more in our latest Bitcoin news today.

The fresh reports show that the institutional investors lose interest in BTC which was among the main reasons behind bitcoin’s bull run according to Glass node. The firm said in a report that the investors are losing interest in the number one cryptocurrency and the proof for this can be found by looking at the Grayscale Bitcoin Trust. GBTC is a popular investment product that allows investors to trade shares in trusts that are holding larger pools of BTC and it is now trading at a discount to the net asset value. What this means is that the shares in the grayscale BTC trust are less expensive to buy than BTC itself. This was not the case until recently as for years, investors paid a premium to purchase into the GBTC. The report said:

“A primary driver for Bitcoin price appreciation in 2020 and 2021 was both the narrative, and the reality of institutional demand. One of the largest factors in this was the one-way flow of coins into Grayscale’s GBTC trust fund as traders sought to arbitrage the high premium observed in 2020 and early 2021. Since Feb 2021, the GBTC product has reversed to trade at a persistent discount to NAV, hitting the deepest discount of -21.23% in mid-May.”

The report went on to add the combined amount of BTC for two popular exchange0traded funds 3iQ and Purpose which decreased. The combined net flows for both ETFs over the past month show that a total of 8037 BTC flowed out of the products. 3iQs holdings declined by 10,483 BTC as the CEO of Toronto-based ETH Fred Pye said:

“There is no slowing down at all. The request we’re getting is still real and significant.”

The outflow according to Pye, was investors that cashed out and already made profits. The 3iQ ETF is one of the North American-only crypto ETFs which is an investment product that tracks the price of an asset like BTC and investors can buy shares that represent the asset. While the US still awaits an ETF, Canada approved a few. Glassnode added that the coin balance on Coinbase is the biggest exchange in the US and remained stagnant. The San Francisco-based exchange pumped out BTC as it was the preferred way for the investors to buy the coin. The report concluded:

“Between observations of the GBTC premium, net outflows from the combined Purpose and QBTC ETFs, and a stagnant Coinbase balance, institutional demand appears to remain somewhat lacklustrer.”