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📉 The ETF Aftermath

Bitcoin’s price has been dropping since the Bitcoin ETFs were released… what gives? Wasn’t this supposed to be the big catalyst to send the price soaring?

Investors have been fleeing the largest ETF at a mass scale: ~$500 million in bitcoin is being sold daily by GBTC, and the inflows into the other ETFs combined just offset that.

Source: BitMEX Research

Why have so many people been getting out of GBTC? 

  1. They charge the highest expense ratio of all ETFs at 1.5% compared to the others around 0.20-0.30%.
  2. GBTC has been around as a fund since 2015, but clients were unable to get their funds out before it became an ETF.
  3. There were concerns about whether GBTC would ever be able to convert from its fund status to an ETF, and concerns about the solvency of its parent company Digital Currency Group.

However, don’t let the numbers fool you: The volume so far has made this the most successful ETF launch of all time, and interest in Bitcoin exposure is very much alive.

Given that the inflows have been offsetting the outflows and $824 million has flown in in total, shouldn’t price be doing better? 

Our take: some investors may have chosen to sell off due to the lack of massive price appreciation they were expecting in the short term after the ETF approval.

Nobody knows how long this episode will last, it could take a few weeks for the market to sort itself out as GBTC accumulated over $35 billion in bitcoin over the past 8 years (550k BTC).

🔐 Self-Custody the Smart Way

Many Bitcoiners are doing self-custody wrong. Not the cold storage/wallet part, but how they withdraw from exchanges!

Each withdrawal generates a bit of data called a UTXO. If you move a large amount of bitcoin in the future made up of many small UTXOs, you will pay significant transaction fees as you take up more space on the blockchain.

In our improved UTXO article, we explain everything you need to know about UTXOs and how to avoid this situation. Take it seriously or you may be giving miners a big donation one day!

⚡ Updated Lightning Stats

In October we published our biggest report of 2023, on the massive growth of the Lightning Network.

We just updated some of our stats for the remainder of the year as we hit a milestone of 10k BTC routed over Lightning, which is twice the bitcoin capacity of the entire network!

In total, we have routed over 3.78 million transactions, many of which are from our clients. 

Remember that you can use the Lightning Network through the River app 📲

The Team at River