Bitcoin: Analyst predicts more ‘upside’ for BTC despite THIS ‘net neutral’

• Grayscale’s GBTC total cumulative outflows hit $14.15 million
• Coinbase analyst sees GBTC selling linked to Gemini as “net neutral”

The new U.S spot Bitcoin [BTC] ETFs recorded net outflows throughout last week. Grayscale’s GBTC led the outflows, totaling $2.1 billion. 

As Q1 2024 inches to an end, there has been a renewed bullish interest over the last 48 hours. In fact, the spot ETFs netted $15.4 million on 25 March. Even so, unfortunately, GBTC outflows persisted into the new week, hitting $350.1 million. 

Needless to say, these outflows fueled many concerns across the community. Coinbase analyst David Duong was quick to comment on whether GBTC’s outflows have an impact on Bitcoin’s price action or not. 

BTC outflows from GBTC persists

In a recent interview, Duong cited the possibility of the bankrupt Gemini repaying its customers using BTC from its GBTC stake. 

“Majority holdings that Gemini holds are going to be paid out in Bitcoin. And if they are, that means they are selling GBTC and buying Bitcoin.” 

The assumption is that the ongoing GBTC outflows are linked to Gemini liquidations. As a result, Duong sees the current GBTC outflows as counter-intuitive; 

“So that means the performance itself should be net neutral.” 

So far, consistent GBTC outflows have slashed Grayscale’s holding from 624.28K BTC to 357.05K BTC, as per Arkham Intelligence data. That translates to a 42.8% drop since the fund converted to an ETF in January. 

Bloomberg’s Senior ETF analyst Erick Balchunas also offered various theories for GBTC outflows. In one of them, he stated, 

“They probably underestimated just how brutally competitive the U.S ETF market is.”

At the time of writing, Bitcoin was on course for a breakout from last week’s range and was trading above $70K. Referring to the prevailing price action, Duong added, 

“We’re really in a new price discovery territory in terms of not knowing what the behavior is going to be.” 

He went on to say,

“I think that we’re going to see continued upside.” 

That being said, Duong’s “net neutral” thesis of GBTC selling can only be confirmed if Gemini customers get repayment in BTC. In the meantime, GBTC outflows could extend as the halving beckons.