Bitcoin

GBTC Outflows Reached Nearly $6 Billion In 16 Trading Days

Key Points:

GBTC outflows saw $5.6 billion in the last 16 days, losing its dominance in the Bitcoin ETF market to BlackRock’s IBIT and ProShares’ BITO.
In response to new rivals like IBIT and FBTC, Invesco and Galaxy Asset Management cut fees to 0.25%.

In a notable development in the cryptocurrency market, Grayscale’s Bitcoin Trust (GBTC) has seen significant outflows, totaling $5,968 million over the last 16 trading days, according to data from BitMEX Research.

GBTC Outflows Reached Nearly $6 Billion In 16 Trading Days 2

GBTC Outflow Surge: $5.6 Billion in 16 Days

Since the launch of spot Bitcoin ETFs on January 11, Grayscale’s converted GBTC ETF has been dominating daily trading volumes until February 1.

On that day, BlackRock’s iShares Bitcoin Trust (IBIT) and ProShares’ Bitcoin Strategy ETF (BITO) outpaced GBTC, with IBIT leading at $301 million in volume and BITO closely following at $298 million. GBTC secured the third spot with $292 million in trades.

This shift marked the end of GBTC’s supremacy, raising concerns over GBTC outflows of $5.6 billion since the ETF conversion, likely influenced by locked-in investors and higher expense ratios compared to competitors.

Emerging Trends of Stability Post-ETF Launch

Despite the significant GBTC outflows, balance data indicates a more balanced trend in the second half of the month, hinting at a potential cooling of the volatility witnessed post-ETF launch. GBTC’s dominance was initially fueled by heavy outflows from the trust, attributed to investors’ newfound ability to redeem their investment after the product’s conversion to a spot ETF.

Grayscale’s high fees have played a crucial role in shedding over $5.8 billion worth of assets since January 11, as reported by BitMEX Research. The competition in the market is intensifying, with Invesco and Galaxy Asset Management reducing their fees to match the industry standard of 0.25%. These newcomers offer lower costs, potentially attracting more investors and reshaping the landscape of the Bitcoin ETF market.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.