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Bloomberg Report: Grayscale Bitcoin Trust (GBTC) Experienced $7.4 Billion in Withdrawals During Initial 31 Trading Days
The Grayscale Bitcoin Trust (GBTC), recognized as the largest Bitcoin exchange-traded fund (ETF) globally, has experienced persistent outflows for an entire month.
As per Bloomberg data, GBTC has seen $7.4 billion withdrawn from the fund over 31 consecutive trading days as of Monday.
This is in sharp contrast to the other nine recently launched spot Bitcoin ETFs, all of which have recorded net inflows since their launch.
What Caused the Significant Outflows from GBTC?
Multiple factors have led to the ongoing outflows from Grayscale.
Although GBTC remains the largest and most actively traded Bitcoin ETF, its 1.5% management fee renders it the priciest option in the market.
In comparison, most of its rivals charge fees below 0.3%. Furthermore, bankrupt entities, such as Genesis Global Holdco LLC, have aimed to liquidate their GBTC holdings.
Despite these factors, the regularity of GBTC’s outflows has taken industry analysts by surprise.
Vident Asset Management noted that while outflows were anticipated due to long-term holders awaiting the fund’s conversion, the length and regularity of the outflows are significant.
“Does it go to 60 days? I don’t think so, but then again, I’m surprised to see it got to thirty,” stated Amrita Nandakumar, President of Vident Asset Management.
It is important to mention that outflows have decelerated in recent days, with only $22 million exiting the fund on Monday compared to a peak of $640 million in January.
The Bitcoin ETF flow data for 26th Feb 2024 is starting to come in:
* GBTC outflow $22.4m, a record low outflow
* EZBC strong, with $7.9m inflowFollow the action live here:https://t.co/4ISlrCgZdk pic.twitter.com/2lfSo6E5pz
— Farside Investors (@FarsideUK) February 26, 2024
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Nonetheless, GBTC’s year-to-date outflow of $7.4 billion ranks as the second-largest among over 3,400 US-listed ETFs.
Other Spot Bitcoin ETFs Attract Inflows
While GBTC faces outflows, the other nine spot Bitcoin ETFs introduced in January are drawing billions of dollars amid the cryptocurrency’s surge.
Major players like BlackRock and Fidelity are at the forefront, accumulating around $6 billion and $4 billion, respectively, followed by Ark Invest and Bitwise.
Earlier this week, daily trading volume for spot Bitcoin ETFs reached nearly $2 billion, marking the highest level since the inaugural trading day on January 11.
As previously reported, spot Bitcoin ETFs experienced a significant influx of about $2.3 billion last week, nearly doubling the prior week’s inflow of $1.2 billion.
It is noteworthy that there has been a net outflow from Gold ETFs, potentially influenced by the increasing demand for U.S. equities among global investors.
Thus far this year, the top 14 Gold ETFs have recorded outflows of $2.4 billion in 2024 as of February 14.
However, GBTC continues to maintain a dedicated following among cryptocurrency supporters due to its success in overcoming regulatory challenges.
Nandakumar indicated that investors loyal to Grayscale, who appreciate their position against the SEC, may disregard GBTC’s relatively high fee.
Year-to-date, GBTC’s share price has increased by 40%, surpassing Bitcoin’s approximate 34% rise.
On Tuesday, Bitcoin exceeded $57,000 for the first time since late 2021, showcasing the ongoing resilience of the leading digital currency.
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