Grayscale, the world’s largest crypto asset manager, has experienced a significant decline in its Bitcoin holdings since the conversion of its Grayscale Bitcoin Trust (GBTC) to an exchange-traded fund (ETF) in mid-January. According to recent data, the company has witnessed outflows totaling approximately 33% of its Bitcoin holdings, amounting to around 199,320 BTC.
Persistent outflows mark the 36th consecutive day
March 4 marked the 36th consecutive day of outflows for GBTC, with a staggering 5,450 Bitcoin, valued at approximately $368 million, leaving the trust. Since its conversion to an ETF, total outflows have reached a substantial $9.26 billion, according to insights from BitMEX Research. Grayscale, which previously held around 620,000 BTC, now retains approximately 420,682 BTC, reflecting the ongoing reduction in its Bitcoin holdings.
Market observers continue to speculate on when Grayscale’s GBTC may witness the cessation of its outflows. While there was a slowdown in outflows in late January and February, recent developments, including a court ruling allowing crypto lender Genesis to liquidate GBTC shares worth $1.3 billion, have renewed concerns. Analysts remain divided on the timeline for the potential end of GBTC’s “Bitcoin bleed,” with some suggesting it may halt after a 25% reduction in outstanding shares, while others anticipate a larger decline.
Rise of competing Bitcoin ETFs
In contrast to GBTC’s struggles, other spot Bitcoin ETFs have surpassed expectations, experiencing significant inflows and trading volumes. March 4 marked the second-largest volume day for the 10 spot Bitcoin ETFs, with approximately $5.5 billion in trading volume.
BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund have particularly performed well, with IBIT’s daily volume reaching $2.4 billion and Fidelity’s recording a record $404.6 million in inflows on March 4 alone.
The success of competing Bitcoin ETFs has been attributed to various factors, including lower fees compared to GBTC and robust investor demand. BlackRock’s IBIT, which boasts assets under management exceeding $11 billion, has witnessed a surge in popularity, with daily volume consistently surpassing expectations. Similarly, Fidelity’s Wise Origin Bitcoin Fund has attracted significant inflows, effectively offsetting the outflows experienced by GBTC.
