Grayscale Bitcoin Trust sees massive $598M outflow
Grayscale’s Bitcoin Trust ETF (GBTC) faced a significant outflow of $598 million on Thursday, marking the second-largest single-day withdrawal since its conversion to an ETF on January 11, 2024. This event contrasts with the continued strong inflows into BlackRock’s iShares Bitcoin Trust (IBIT), which saw over $600 million for the second consecutive day. The outflows from GBTC have raised questions about investor sentiment and fund performance, particularly in light of the recent approval for the bankrupt lender Genesis to sell approximately $1.6 billion worth of GBTC shares.
The substantial outflow from GBTC comes amidst a broader context of fluctuating investor interest in Bitcoin ETFs, which have recently been approved by the Securities and Exchange Commission. While GBTC has experienced significant outflows, totaling roughly $8.4 billion over the past seven weeks, the overall category of 10 US spot Bitcoin ETFs has seen net inflows of about $7.5 billion. This dynamic reflects the shifting landscape of Bitcoin investment vehicles and the varying fees and performance metrics that influence investor decisions.
Despite the outflows from GBTC, the Bitcoin ETF segment has witnessed a surge in demand, with BlackRock’s IBIT nearly matching its all-time high inflow of $612 million from the previous day. The interest in these products, which offer investors easier access to Bitcoin, has contributed to the cryptocurrency’s price rise above $60,000 in recent days. However, the price of Bitcoin has seen a slight correction, with a 1% decrease from 24 hours prior, standing at approximately $62,000 as of early Friday morning.
The contrasting flows between GBTC and other Bitcoin ETFs highlight the importance of fees and performance in investor decision-making. With a higher expense ratio of 1.5%, GBTC’s outflows may be influenced by investors seeking more cost-effective options. The recent developments in the Bitcoin ETF market, including the potential involvement of traditional financial institutions like Morgan Stanley, underscore the growing integration of cryptocurrency into mainstream investment strategies.