Grayscale Bitcoin ETF Faces $1.6B Outflows as Bitcoin Halving Nears

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Approaching the Bitcoin halving, Grayscale’s GBTC ETF has seen significant capital outflows. In just the past five days, investors have withdrawn $89.9 million, amounting to a net withdrawal of approximately $1.6 billion since January. This trend reflects increasing investor uncertainty in the broader market.

Despite holding the early lead in Bitcoin ETFs with Grayscale, their market dominance seems to be shrinking. Newcomers like BlackRock and Fidelity have gained substantial market shares. For instance, during the same week, these new entrants, Fidelity’s FBTC and BlackRock’s IBIT, attracted net inflows of $37.3 million and $18.7 million respectively. This has helped alleviate some liquidity concerns in the larger market.

Grayscale GBTC Faces $1.6 Billion Outflows

Among the major Bitcoin ETF contenders, GBTC stands out. On April 18th, BlackRock experienced significant outflows, totaling over $17 billion from investors. Consequently, Grayscale’s assets under management (AUM) decreased, with a value of less than $20 billion.

Based on Eric Balchunas’ analysis for Bloomberg, external events like the bankruptcy of FTX and Genesis may have caused significant outflows from Grayscale’s Bitcoin Trust (GBTC). Some people also believe that Grayscale’s higher fee of 1.5% compared to most competitors could be a deterrent for new investors.

Due to the financial challenges facing the company, Grayscale’s CEO Michael Sonnenshein has announced that the fees will decrease gradually in the future. Additionally, he proposed a potential new product – a Bitcoin Mini Trust ETF – which could attract more investors due to its lower cost for exposure to Bitcoin.

Bitwise CEO Highlights Stealthy Bitcoin Adoption

The crypto registration landscape shows a gradual shift towards acceptance among financial specialists, with Bitcoin receiving cautious yet significant interest from registered investment advisors (RIAs) and multifamily offices. According to Bitwise CEO Hunter Horsley, these institutions are quietly exploring the Bitcoin market without making their involvement public.

Horsley’s remarks represent Bitwise’s findings about crypto registration this year. Unnoticed by the public, institutions have started adding Bitcoin to their investments. As we approach the Bitcoin halving event, it is expected that more institutions will yield to the pressure from the Bitcoin market and register their holdings.

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2024-04-19 22:03