Grayscale’s Bitcoin Trust (GBTC) has seen outflows reach their lowest point over the past few days, signaling a slowdown in withdrawal volumes.
According to data from BitMEX Research, GBTC had withdrawals of $44.2 million on Feb. 23, the lowest daily volume since its conversion on Jan. 11 from an over-the-counter product to an exchange-traded fund (ETF).
By the end of January, GBTC reported withdrawals totaling $5.64 billion, with a significant $640 million exiting on Jan. 22 alone. February has seen a decline in outflows, amounting to $1.8 billion so far. Since its inception, GBTC has witnessed a total withdrawal of $7.4 billion.
In contrast, BlackRock's IBIT has amassed over $6.6 billion in investment since launching, followed by Fidelity’s FBTC with over $4.7 billion in capital. The third position is held by ARK 21Shares, with inflows of $1.4 billion over the same period.
Bitcoin ETF Flow - 24 Feb 2024
— BitMEX Research (@BitMEXResearch) February 24, 2024
All data now in, except perhaps for the Galaxy/Invesco product
Friday was a strong day, with +$232.3m of net inflow. Also, the outflow for GBTC was just $44m, lowest level since 11th Jan pic.twitter.com/1Q0OtjEJLt
GBTC Outflows
The significant exit from GBTC was anticipated. The spot Bitcoin ETF’s approval by the Securities and Exchange Commission on Jan. 10 opened the door for GBTC holders to convert and redeem their shares. Previously, investors had to sell shares on the secondary market to exit positions.
According to analysts, investors have also rebalanced their portfolios and migrated to Bitcoin ETFs with lower fees in recent weeks. GBTC charges a 1.5% annual management fee, whereas other issuers charge as little as 0.19%.
Grayscale’s Bitcoin fund may have another challenge ahead. The bankrupt crypto firm Genesis Global Holdco was recently granted court permission to sell $1.3 billion in GBTC's shares to reimburse investors.
The massive outflows, however, may be counterbalanced by Grayscale’s fee structure. “They can have assets chopped by like 90% and still make more than all of the other issuers combined,” noted ETF Store president Nate Geraci on X (formerly Twitter).
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