Grayscale BTC ETF Records Lowest Outflows Since Debut

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The Grayscale Bitcoin Trust (GBTC) has recently experienced a notable decline in withdrawal volumes, reaching its lowest point in the past few days, according to data from BitMEX Research. 

On February 23, GBTC recorded withdrawals of $44.2 million, marking the lowest daily volume since its transformation on January 11 from an over-the-counter product to an exchange-traded fund (ETF).

As reported earlier by TheCoinRise, Grayscale, a leading digital asset management firm, sold close to $2.14 billion (approximately 52,227 BTC) worth of BTC.

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Grayscale Outflows Decline

The trend in outflows is evident when considering the overall performance of GBTC in January. By the end of the month, total withdrawals amounted to $5.64 billion, with a substantial $640 million leaving on January 22 alone. 

However, February has seen a decline in outflows, totaling $1.8 billion so far. Since its inception, GBTC has witnessed a total withdrawal of $7.4 billion.

BTC ETFs Gaining Traction

In contrast, other crypto funds have been gaining traction. BlackRock’s IBIT has accumulated over $6.6 billion in investments since its launch, closely followed by Fidelity’s FBTC with over $4.7 billion in capital. The third position is secured by ARK 21Shares, attracting inflows of $1.4 billion over the same period.

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Significant outflows from GBTC were anticipated, especially following the approval of the spot Bitcoin ETF by the Securities and Exchange Commission on January 10. This development provided GBTC holders with the opportunity to convert and redeem their shares directly, a departure from the previous necessity of selling shares on the secondary market to exit positions.

Grayscale and Others Continue to Compete

Analysts suggest that investors have been rebalancing their portfolios and migrating towards Bitcoin ETFs with lower fees in recent weeks. Grayscale BTC ETF, with a 1.5% annual management fee, has faced competition from other issuers charging as little as 0.19%.

Despite the significant outflows, Grayscale’s fee structure may serve as a counterbalance. Nate Geraci, president of ETF Store, highlighted that “they can have assets chopped by like 90% and still make more than all of the other issuers combined,” emphasizing the resilience provided by the fee structure amidst changing market dynamics.

Sale of $1.3B GBTC Shares

In addition to these challenges, Grayscale’s Bitcoin fund faces potential headwinds as bankrupt Genesis Global Holdco has been granted court permission to sell $1.3 billion in GBTC shares to reimburse investors.

The firm holds $1.3 billion in Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG).

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