Outflows Slowdown
Outflows from Grayscale’s Bitcoin Trust (GBTC) are easing, as seen in Bitcoin ETFs’ trading activity. Investor anxiety over Grayscale’s Spot ETF seems to be settling, with the ETF cohort attracting significant trading volumes and asset growth. GBTC’s daily outflows dropped to $44.2 million on Friday, the lowest since spot Bitcoin ETFs launched.
Stabilization After Elevated Outflows
After weeks of elevated outflows totaling over $7.44 billion, investors withdrew just $436.2 million from Grayscale’s Bitcoin Trust last week. The lowest daily outflow of $44.2 million occurred on the last day of the week.
GBTC’s Dominance and Conversion to Spot ETF
GBTC is the largest Bitcoin ETF, launched in 2013 as a Bitcoin trust available only in OTC markets. It grew over the years as the sole option for investors in the crypto industry. After a lengthy regulatory process, the SEC approved GBTC’s conversion into a Spot Bitcoin ETF, which went live on January 11, along with nine other approved ETFs.
Initial Withdrawals and High Management Fees
GBTC held around $27 billion worth of BTC assets when it began trading as an ETF. However, the conversion was accompanied by significant withdrawals, resulting in $5.55 billion worth of withdrawals by the end of January. Analysts attribute the outflows to Grayscale’s high management fees (1.5%).
Other Bitcoin ETFs’ Growth
During this period, other Bitcoin ETFs continued to attract new money. BlackRock’s iShares Bitcoin Trust (IBIT) now holds over $6.64 billion worth of BTC, followed by the Fidelity Wise Origin Bitcoin Fund (FBTC) with $4.73 billion.
Future of Grayscale’s Bitcoin ETF
While last week’s outflow data is positive for Grayscale and the ETF market, outflows may continue in the coming weeks. Bankrupt crypto lending firm Genesis received court approval to sell its $1.3 billion worth of GBTC to repay creditors. This potential liquidation raises concerns about the impact on BTC’s price. However, many remain optimistic, with a report from Coinbase suggesting that full liquidation would have a neutral impact on the market as funds are expected to remain in the crypto ecosystem.
At the time of writing, Bitcoin was trading at $51,300, while Grayscale’s GBTC had $22.7 billion worth of assets under management.
