GBTC Outflows Surge Past $16 Billion, Defies CEO’s ‘Equilibrium’ Comment

The amount of Bitcoin held by the Grayscale Bitcoin ETF (GBTC) is decreasing rapidly with no end in sight. On Friday, April 12, GBTC experienced significant outflows totaling over $166 million, resulting in the loss of approximately 2,500 Bitcoin from the fund’s holdings.

GBTC Outflows Surpass $16 Billion

According to Farside Investors’ figures, over $16.2 billion has flowed out of the Grayscale Bitcoin ETF (GBTC) since its launch in January this year. In April alone, daily withdrawals from GBTC have ranged from a low of $75 million to a high of $300 million. However, investments into all Bitcoin ETFs have been relatively weak, indicating decreasing interest from investors.

This week, a total of only $572 million flowed into the nine newly established Bitcoin ETFs, such as GBTC, marking the poorest inflow we’ve seen so far.
— Joe Consorti (@JoeConsorti) April 13, 2024

This week, Bitcoin ETFs experienced a collective outflow of approximately $767 million from the Grayscale Bitcoin Trust alone. Consequently, the total inflows into Bitcoin ETFs for the week have been unfavorable due to GBTC’s significant withdrawals.

Alternatively, BlackRock has remained firm as the assets in IBIT Bitcoin ETF managed by them surpassed $15 billion. This means BlackRock is now not far behind Grayscale in terms of Bitcoin holdings. It’s likely that most of the GBTC funds leaving Grayscale have been transferred to BlackRock.

Are Outflows Really Reaching an ‘Equilibrium’?

Recently, Michael Sonnsonhein, CEO of Grayscale, expressed hope that the selling of Bitcoin from the Grayscale Bitcoin Trust (GBTC) may be slowing down after a long spell. This view indicates a positive outlook among traders and investors, implying that the persistent selling could eventually align with purchasing activity in the market as outflows possibly approach balance. However, this is not the case based on the current figures.

An significant reason for the large withdrawals from GBTC is the hefty management fee the fund imposes. Yet, Sonnenshein has been reluctant to lower these fees, even as they lose investors to rivals.

Sonnenshein explained that as products age, they go through a maturation phase resulting in market concentration, with investors preferring to put their money into a limited number of proven options. This trend also brings about fee reductions, such as the one we’re implementing for GBTC, indicating that we’ve reached the final stages of the initial adoption period.

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2024-04-13 10:11