Key Points
- Since converting to an ETF in mid-January, Grayscale has witnessed 33% of its Bitcoin holdings on GBTC removed.
- Grayscale's spot Bitcoin ETF launch and higher GBTC fees have contributed to this trend.
Grayscale, the world's biggest crypto asset manager, has experienced a significant reduction of its Bitcoin holdings on GBTC. Since its transition into an ETF in mid-January, nearly a third of its Bitcoin assets have been withdrawn.
On the 36th consecutive day of outflows, March 4, GBTC saw 5,450 BTC or approximately $368 million leave the trust. This brings the total outflow since its conversion to a staggering $9.26 billion.
ETF Conversion and GBTC Outflows
Before transforming the fund into an ETF, Grayscale managed about 620,000 BTC. The inception of Grayscale's spot Bitcoin ETF gave investors the previously unavailable option to redeem their shares for Bitcoin. This, coupled with GBTC's higher fees compared to other ETFs like BlackRock's IBIT and Fidelity's FBTC, has likely contributed to the outflows.
Currently, the GBTC fund holds 420,682 BTC, estimated to be worth around $28.8 billion. Market watchers have been speculating about when GBTC might halt its “Bitcoin bleed.” Although GBTC outflows slowed down in late January and February, they resumed in mid-February when bankruptcy courts permitted crypto lender Genesis to liquidate about $1.3 billion worth of GBTC shares to repay investors.
Performance of Other Bitcoin ETFs
Meanwhile, the other nine spot Bitcoin ETFs have been performing well during the ongoing Bitcoin rally. March 4 saw the second-largest volume day for the ten spot Bitcoin ETFs with approximately $5.5 billion.
The BlackRock IBIT fund reported around $2.4 billion in daily volume, with its assets under management now exceeding $11 billion. All the new ETFs have also seen over a 30% rise in volume in six days.
Fidelity also had a record day on March 4, with inflows of $404.6 million. This has more than compensated for the GBTC outflow. The Bitwise Bitcoin ETF (BITB) also experienced a good day, with $91 million of inflows, its highest since February 15.
