Check this Weird Bitcoin Chart

Briton Ryle

Written By Briton Ryle

Posted June 5, 2024

I’m going to share a chart with you – and I understand it’s a little weird looking…

btc etf

This chart shows daily inflows into all the currently available Bitcoin ETFs. Each color represents a different Bitcoin ETF, sponsored by a different company. The darkest color you see represents the Bitcoin ETF from Blackrock. The ticker symbol for the Blackrock Bitcoin ETF is IBIT.

Fidelity’s Bitcoin ETF is in light blue, the ticker symbol is FBTC. The red is the Grayscale Bitcoin Trust, ticker symbol GBTC.

You might wonder why the Grayscale Bitcoin Trust (in red) shows consistent outflows all year. There are two reasons. The first is that the Grayscale Bitcoin Trust was the first opportunity for investors to own Bitcoin in an ETF-like investment vehicle. It was the only game in town, so it had the most investor money (inflows). 

Because Grayscale was the only game in town before this year, it could charge whatever management fees it wanted. And it took full advantage, charging investors 2.5% a year in fees. 

Now, the whole point of an ETF is that it should have low management fees. That’s because an ETF is a fund that tracks and holds a specific asset or group of stocks. And you don’t need to pay a fund manager to hold a specific group of stocks or a particular asset. Like with a Bitcoin ETF, all it holds is Bitcoin. How hard is that? 

So at the start of 2024, when Fidelity, and Blackrock, and Invesco and the other ETF companies got approval to launch Bitcoin ETFs, they set the management fees low  – like 0.25% and 0.3%…

But not Grayscale. Grayscale did cut its fees – to 1.5%. That’s not low enough.  It’s five or six times more expensive to own the Grayscale Bitcoin Trust. Which, seems kinda stupid. I sure hope they don’t teach the “let’s offer the same product but charge a lot more than our competitors” business model in any business school.

But in any event, that’s why investors have been selling Grayscale all year.  

Buy Stocks that Go Up

The other important thing to note about that Bitcoin ETF chart is that, aside from Grayscale, there are virtually no outflows from any of them. I count four days of outflows from the group overall this year. And those rare days when investors sell, well, they aren’t selling very much. 

Money is consistently and relentlessly flowing into Bitcoin ETFs. It’s been doing so ever since these ETFs were launched. 

The message is pretty simple: people want to own Bitcoin. The ETFs are an easy and secure way to accomplish this. I will add that when people keep buying a thing, and not selling a thing, the price of that thing is likely to go higher. 

That’s even more true when the supply of that thing is finite. 

The Bitcoin system is designed so that only 21 million Bitcoin will ever be produced. Once that 21 million number is reached, that’s it: no new Bitcoin. Ever. 

Right now, there are 19,727,800 Bitcoin in the world. There are only 1,272,200 more Bitcoin that will ever come into existence.

And these Bitcoin ETFs are adding to their holdings just about every day. 

This is one of the most obvious supply and demand imbalances I’ve ever seen. 

Just imagine what would happen if gold miners suddenly said “well, that’s it, there’s no more gold.” The price of gold would skyrocket overnight. It is not courageous to think that the odds of a Bitcoin moonshot increase every day, as new supply dwindles. 

Plus, with the entrance of Blackrock, Fidelity and other mainstream investment companies, Bitcoin’s risk profile has gotten way more attractive. Investors don’t have to worry about being hoodwinked by Bankman-Fried type charlatans anymore. 

Bitcoin Post-Halving Rally

New Bitcoins are created after supercomputers plow through a certain amount of computing tasks. Complete the computing tasks and the “reward” is a block of Bitcoin. The process is called Bitcoin “mining.”

The Bitcoin system is designed to cut the amount of Bitcoin rewards in half every four years or so. It’s called “halving.” The first block of Bitcoin ever mined was the so-called Genesis Block. It was 2009. And the Genesis Block contained 50 Bitcoin. 

Because of halving, the current reward is just 3.25 Bitcoin. New supply has slowed to a trickle.

The last Bitcoin halving occurred in late April. Bitcoin rallies after these halving events. It usually takes a couple of months for the rally to really get going, but when it does, it’s powerful. 

The last two times the Bitcoin halving occurred were in 2016 and 2020. Each time Bitcoin was 400%-500% higher within 12 months. 

One final note about the chart at the top of this article: yesterday Fidelity’s Bitcoin ETF (FBTC) saw the second-highest inflows since inception. That’s significant and I expect we are pretty close to the next leg higher for Bitcoin. 

You know what to do.


Briton Ryle
Chief Investment Strategist
Outsider Club


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