On Friday, April 12, there were large withdrawals from the Grayscale Bitcoin ETF, GBTC, totaling over $166 million in USD and approximately 2,500 Bitcoins (BTC) from the fund’s reserves.
Based on Farside Investors’ figures, over $16.2 billion has been withdrawn from GBTC since the Bitcoin ETF debuted in January. The daily withdrawals from the Grayscale Bitcoin Trust have varied between $75 million and $300 million since April.
While Bitcoin ETF investments have seen only modest additions, suggesting waning interest from investors, this past week saw a substantial withdrawal of $767 million from GBTC, further contributing to the overall reduction in Bitcoin ETF inflows.
BlackRock continues to see substantial growth in the management of bitcoin assets as the value of IBIT Bitcoin ETF surpasses $15 billion, approaching Grayscale’s Bitcoin trust reserves. It is believed that a large portion of outflows from Grayscale Bitcoin Trust (GBTC) have shifted to BlackRock.
Michael Sonneshein, the CEO of Grayscale, suggested earlier this week that withdrawals from the Grayscale Bitcoin Trust could be slowing down, indicating a positive outlook among traders and investors. However, recent data raises doubts about this optimistic view.
One major cause for the large withdrawals from GBTC is its high management fee, which sets it apart from other U.S. Bitcoin ETFs with an average fee of only 0.30%. However, Sonnenshein has been reluctant to reduce these fees despite losing investors to more affordable competitors. The annual fee for GBTC stands at a significant 1.5%.
Sonnenshein pointed out that new commodity or thematic investment products, such as Grayscale Bitcoin Trust, can spark great interest and enthusiasm in markets at their inception. Over time, though, these offerings become more established, resulting in market convergence as investors tend to favor a select few options.
Based on Farside’s figures, there was a notable decrease in GBTC’s outflows on April 10, amounting to $17.5 million, compared to the substantial outflows of $154.9 million the previous day. The smallest previous outflow occurred on Feb. 26, with a total of $22.4 million leaving GBTC. The average daily outflows over the past four months amounted to approximately $257.8 million.
In 2015, GBTC was introduced, and then in January, it transformed into an ETF. This change coincided with the debut of ten other Bitcoin ETFs following Grayscale’s successful lawsuit against the Securities and Exchange Commission, compelling them to reconsider a previous rejected application for GBTC’s conversion.
Recently, Genesis, a crypto lending company facing bankruptcy, sold around 36 million shares of GBTC to obtain roughly 32,041 Bitcoins.
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2024-04-13 16:05