Grayscale's Bitcoin ETF Market Share Dips Below 50% as Sector Competition Intensifies
Summary:
Grayscale's Bitcoin spot exchange-traded fund (ETF) market share has dropped below 50% for the first time since spot Bitcoin ETFs were introduced in the US. As of March 12, Grayscale Bitcoin Trust held $28.5 billion, accounting for 48.9% of total US Bitcoin ETFs assets. Over $11 billion has flowed out of Grayscale's ETF, leading to a market shift towards Bitcoin ETFs with lower fees. Despite concerns, increasing net inflows into BlackRock’s iShares Bitcoin ETF and the Fidelity Wise Origin Bitcoin Fund provide optimism to the industry. As newly launched ETFs attract increasing inflows, they are perceived as a key contributor behind Bitcoin's rapid price appreciation, hitting a recent all-time peak of $72,900 on March 11.
Grayscale, a crypto asset manager, has seen its Bitcoin (BTC) spot exchange-traded fund (ETF) drop below 50% market share for the first time since the launch of spot Bitcoin ETFs in the US on January 11. As of March 12, Grayscale Bitcoin Trust (GBTC) had assets under management (AUM) of just $28.5 billion, making up 48.9% of the total $56.7 billion held across ten US Bitcoin ETFs, data from Dune Analytics revealed. This is the first time Grayscale's GBTC fund represents less than 50% of total Bitcoin ETF AUM.
On the inaugural trading day of the ten US spot Bitcoin ETFs, Grayscale's fund made up nearly all (99.5%) of their total AUM. However, steady daily outflows from GBTC, averaging $329 million per day last week, have chipped away at its market share. The largest GBTC outflows occurred within the first month of Bitcoin ETFs becoming available, with $7 billion departing the fund in just over a month, but reductions started slowing in late January. Some analysts believed the outflows could be ending. However, mid-February saw bankruptcy courts permit crypto lender Genesis to sell approximately $1.3 billion in GBTC shares to repay investors, resulting in a resurgence of outflows.
So far, GBTC has seen over $11 billion in outflows, according to data from Farside Bitcoin ETF. The Grayscale ETF originally started as a trust providing institutional investors access to Bitcoin by holding onto funds for at least half a year. After winning a lawsuit against the Securities and Exchange Commission last August and subsequent approvals of other spot Bitcoin ETF applications, the trust transitioned to an ETF. This has allowed institutional investors to permanently exit the fund or transfer their assets to Bitcoin ETFs with cheaper charges.
Conversely, despite initial market jitters due to increasing GBTC outflows, growing net inflows into the BlackRock’s iShares Bitcoin ETF (IBIT) and the Fidelity Wise Origin Bitcoin Fund (FBTC) have given the market reasons for positivity. Since their inception, these two funds have brought in $16.9 billion.
Many market analysts place importance on the role of increasing inflows into the nine new ETFs in boosting the value of Bitcoin, which reached a record high of $72,900 on March 11. Currently holding over 200,000 BTC, or about $14.3 billion at current prices, BlackRock’s fund data from K33 Research confirms.
Published At
3/13/2024 4:37:21 AM
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