Grayscale’s Bitcoin Trust Sees Lowest Withdrawal Point amidst ETF Conversions
Summary:
Grayscale’s Bitcoin Trust (GBTC) has seen its lowest withdrawal point recently, indicating a reduction in the withdrawal volumes. BitMEX Research shows GBTC withdrawals dropped to $44.2 million on February 23, the smallest daily quantity since January 11, when it changed from an over-the-counter product to an ETF. Meanwhile, other funds like BlackRock's IBIT gathered more than $6.6 billion since it began. The anticipated large exit from GBTC corresponds with the recently SEC-approved spot Bitcoin ETF, allowing GBTC investors to convert and redeem shares. A bankrupt cryptocurrency firm also has court permission to sell a considerable amount of GBTC shares to compensate its investors.
Withdrawals from Grayscale's Bitcoin Trust (GBTC) have recently dipped to their lowest point, indicating a decrease in the volume of money being removed. BitMEX Research information reveals that on February 23, GBTC's withdrawal levels dropped to $44.2 million, the smallest daily amount since its transition from an over-the-counter offering to an Exchange Traded Fund (ETF) on January 11. By the close of January, GBTC's total withdrawals stood at $5.64 billion, with a substantial $640 million being removed on January 22 alone. The volume of outflows in February has lessened, totaling $1.8 billion this month. From the time of its establishment, GBTC has observed total withdrawals amounting to $7.4 billion.
Meanwhile, BlackRock's IBIT accumulated over $6.6 billion in investments since its inception, Fidelity’s FBTC secured more than $4.7 billion, and ARK 21Shares took third place with total inflows of $1.4 billion.
A significant withdrawal from GBTC was predicted after the Securities and Exchange Commission gave the green light to the spot Bitcoin ETF on January 10, enabling GBTC stakeholders to convert and redeem their shares. Before this development, investors were required to sell shares on the secondary market to exit positions. Analysts state that investors have been readjusting their assets and moving to Bitcoin ETFs with lower charges. GBTC levies a 1.5% annual management fee, significantly higher than other issuers who charge a meager 0.19%.
GBTC is likely to face another hurdle soon. Bankrupt cryptocurrency corporation Genesis Global Holdco recently received court authorization to sell $1.3 billion worth of GBTC shares to repay its investors. These significant withdrawals may be balanced by Grayscale's fee structure, as according to ETF Store president Nate Geraci on X (formerly Twitter): "They can have assets chopped by about 90% and still make more than all of the other issuers combined.
Published At
2/25/2024 10:17:54 PM
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