Grayscale Bitcoin ETF Experiences Major Outflows, BlackRock Gains Ground
Summary:
The Grayscale Bitcoin exchange-traded funds (ETF), GBTC, continues to see noteworthy outflows, with over $166 million and over 2,500 Bitcoin (BTC) withdrawn on April 12. The GBTC's outflow has exceeded $16.2 billion since its January launch. BlackRock's IBIT Bitcoin ETF, on the other hand, is making strides with assets under management exceeding $15 billion. Grayscale CEO, Michael Sonnenshein, has indicated a potential stabilization of the GBTC's outflows, despite current data suggesting otherwise. High management fees have contributed to GBTC's massive outflows, but Sonnenshein appears reluctant to reduce them.
On Friday, April 12, the Grayscale Bitcoin exchange-traded funds (ETF), GBTC, reported substantial outflows, seeing withdrawals of over $166 million and over 2,500 Bitcoin (BTC). Data from Farside Investors shows that the fund has seen outflows exceeding $16.2 billion since its January launch. The Grayscale Bitcoin Trust (GBTC) has seen daily outflows ranging from $75 million to $300 million since April. Meanwhile, inflows into Bitcoin ETFs have been limited, pointing to dwindling investor interest. The weekly outflows from GBTC hit $767 million, contributing to the overall negative trends in Bitcoin ETFs.
BlackRock remains a strong contender as its IBIT Bitcoin ETF's assets under management surpass $15 billion, closing in on Grayscale's Bitcoin reserves. A significant amount of GBTC's outflows may have found their way to BlackRock.
Earlier this week, Grayscale CEO Michael Sonnenshein hinted that GBTC's outflows may be stabilizing, signaling potential investor confidence. However, recent data may not support this optimistic view.
Exorbitant management fees have been blamed for GBTC's substantial outflows. Despite this, Sonnenshein has shown reluctance to reduce these fees even as the fund loses ground to rivals. Among all U.S. Bitcoin ETFs, GBTC charges the highest management fee at 1.5% annually, in contrast to the 0.30% average charged by its competitors.
Sonnenshein pointed out that initial enthusiasm for products like Grayscale Bitcoin Trust is common when these emerge. However, as they mature, the market begins to consolidate around a few offerings.
Recent statistics from Farside show that GBTC's outflows dropped to $17.5 million on April 10, a significant decrease from the $154.9 million outflows marked on April 9. The earlier low was on February 26 when GBTC experienced outflows of $22.4 million. The daily GBTC outflows over the last four months average at $257.8 million.
Launched in 2015, GBTC converted to an ETF in January coinciding with the launch of nine other Bitcoin ETFs. This came after Grayscale won a legal dispute against the Securities and Exchange Commission which had denied a GBTC conversion bid.
The insolvent crypto lending company Genesis recently sold roughly 36 million GBTC shares, acquiring 32,041 Bitcoin in return.
Published At
4/13/2024 3:53:51 PM
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