Bitcoin has extended gains to 5% today and touched $41,999.
The $2000 gain today is the first genuinely good day for bitcoin since the US ETFs were launched on January 11 and it touched $49,000. Since then the inflow numbers into bitcoin ETFs have been disappointing, particularly with large outflows from GBTC.
The daily chart is in an interesting spot and a close above $41,800 would paint something of a reversal.
daily bitcoin chart
The turn may be attracting new money into US ETFs with volume on Blackrock’s IBIT today at 11.86m at midday, exceeding yesterday’s total volume of 9.1m with nearly four hours of trading to go.
Reuters today reports that roughly 20 hedge funds bought GBTC from 2021-2023 in a bet on ETF approval and the discount to NAV closing. Many of them will surely have been closing out the trade since the ETF launch and the closing of the GBTC discount.
For many portfolio managers, the price arbitrage was opportunistic.
“It worked out to be a very good trade,” said Christopher Brown, founder of the multi-strategy hedge fund Aristides Capital, based in Louisville, Kentucky. The $240 million firm invested roughly $20 million in GBTC with an average discount of 30% to its assets.
The fund has sold most of its positions and plans to fully exit in the coming months, as Brown is not interested in investing in the spot bitcoin ETF. “We’re not inherently super excited about bitcoin.”