Grayscale spot Bitcoin ETF ‘halves’ before BTC halving

Grayscale Investment, a significant Bitcoin (BTC) investor, has observed a 50% decrease in its physically-backed Bitcoin ETF prior to the upcoming halving event.

The amount of Bitcoin held in the Grayscale Bitcoin Trust ETF (GBTC) decreased by approximately 309,610 BTC between its launch on January 11 and an undisclosed subsequent date.

Based on GBTC’s information, the Bitcoin ETF contained approximately 309,871 Bitcoins when it reached its 66th day of trading on April 16. This represented a decrease of half since its debut. Currently, this amount is valued at around $19.7 billion.

Grayscale spot Bitcoin ETF ‘halves’ before BTC halving

The GBTC event of cutting its Bitcoin rewards in half occurred only two days prior to the highly anticipated Bitcoin reduction in mining rewards, decreasing it by 50% from 6.25 BTC to 3.125 BTC.

Every fourth year, or approximately every 210,000 transactions, an essential happening called the Bitcoin halving takes place. This event is linked to significant price increases in the cryptocurrency market.

The timing of these two events doesn’t show a connection, but they add to the string of coincidental events in Bitcoin history.

Grayscale spot Bitcoin ETF ‘halves’ before BTC halving

Since its debut on the stock market, GBTC has seen a large number of investors selling off their shares, which in turn has negatively affected the value of Bitcoin.

The primary cause for the substantial outflows has been identified as high trading fees. Among the ten Bitcoin ETFs available in the US, Grayscale Bitcoin Trust (GBTC) had the highest fees at 1.5% from the beginning of trading. In response, most other Bitcoin ETFs reduced their fees to gain a competitive edge, offering trading commissions ranging from 0.2% to 0.4%.

At the onset of trading, GBTC’s major competitor, BlackRock’s iShares Bitcoin Trust (IBIT), charged a management fee of 0.25%, excluding a 0.12% discount applicable for the initial $5 billion worth of assets during the waiver period.

BlackRock’s Bitcoin ETF, which allows investors to buy and sell spot bitcoin, has experienced significant growth. The fund held only 2,621 bitcoins when it started trading, but by April 16, its holdings had increased more than 10,000% to 272,548 bitcoins. Currently, BlackRock’s Bitcoin ETF holds approximately 13% less bitcoin than the largest Bitcoin ETF, GBTC.

Although IBIT has experienced significant expansion, it has not been able to take in the large outflows of 309,349 BTC from GBTC. On the other hand, Bitcoin spot ETF issuers, numbering eight, have amassed approximately 224,552 BTC collectively since the market opening, excluding GBTC’s share.

Starting from April 16, 2024, a total of approximately 862,162 Bitcoins, valued at about $54.7 billion, were being held in the top 10 Bitcoin ETFs.

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2024-04-17 13:36