Institutional demand for Grayscale Bitcoin Trust (GBTC) and QBTC is decreasing, is this a bearish signal?

Have you ever wondered why Grayscale Bitcoin Trust (GBTC) has emerged as the standard for measuring institutional interest in Bitcoin? According to a report from CryptoQuant, it seems that institutional demand for GBTC and QBTC is decreasing. And the less demand of BTC from institutional should be bearish.

Institutional demand for Grayscale Bitcoin Trust (GBTC) and QBTC is decreasing

The Bitcoin Fund is a public Bitcoin fund listed on the Toronto Stock Exchange under the symbols QBTC and QBTC.U.


QBTC reduced 7.98K of $BTC at the beginning of Jun. 21 | Source: CryptoQuant

The digital currency investment product was among the only ones that offered hedge funds, endowments, pension funds, and family offices a way to gain exposure to Bitcoin without needing them to own the digital asset themselves.

Therefore, a rising capital inflow into GBTC — such as the one reported last year, wherein Wall Street investors deposited about $18.2 billion in the fund — served as a metric to gauge growing institutional interest in the crypto sector. Conversely, a declining capital inflow reflected institutional withdrawal or profit-taking, like the one happening since the first quarter of 2021.


GBTC is holding $BTC since the last purchase on Feb. 21 | Source: CryptoQuant

Not long ago, analytics firm Skew reported that GBTC stops attracting new investments after February 2021. GBTC premiums increased by 30% earlier this year. But the latest Skew chart identifies it at -11.40%. GBTC’s premium to its NAV is -40.20% at its lowest, the worst in history.

Seres Lu, vice president of Grayscale Investments, said companies have closed various trusts for new investments:

“The capital inflows paused because Grayscale periodically closes its various trusts for administrative purposes, and GBTC was closed on March 2nd, and remains closed, to new investments.”

Business competition with Canada’s Bitcoin ETF may also have choked GBTC inflows.

Bitcoin remains up by a strong 8% over the past 24 hours of trading as it gained over $6.000 in less than two days, before slightly retracing from the $37.6000 resistance area.

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