Home » Grayscale’s Bitcoin ETF records $640 million in outbound volume, a record – How to explain it?

Grayscale’s Bitcoin ETF records $640 million in outbound volume, a record – How to explain it?

by v

The Grayscale Bitcoin Trust (GBTC) recorded outgoing volume of $642.5 million, marking its worst day of 2024. The drop comes as the Bitcoin price retreats 15% from its all-time high (ATH) of $73,000.

Grayscale’s GBTC suffers its toughest day of 2024

Despite a meteoric rise in its price over the past few weeks, partly spurred by record incoming volumes into spot Bitcoin ETFs, BTC is pausing with a correction of around 15%, now trading at $63,000.

This Monday, March 19, 2024 stands out as the 2nd least favorable day for spot Bitcoin ETFs, recording $154 million in net outgoing volumes, equivalent to 2,293 BTC.

A more detailed analysis of volumes reveals that, on the same day, Grayscale’s GBTC is nevertheless the only ETF to experience a net outflow of capital, recording its lowest day yesterday with $642.5 million in outgoing volumes, or 9,539 BTC.

How to explain the record outgoing volume on Bitcoin spot ETFs?

Since January 2024, Grayscale’s GBTC has lost around 239,000 BTC under management, or $1.5 billion at the current price, while other ETFs have grown significantly, capturing the market share lost by GBTC.

To date, IBIT represents 27.6% of Bitcoin spot ETF assets under management (AUM), FBTC 16.1%, and GBTC maintains 45.3%.

While all spot Bitcoin ETFs have accumulated $12.3 billion in incoming volume since their launch in January 2024, Grayscale’s GBTC has not recorded a single day of positive volume. There are two main reasons for this phenomenon:

Firstly, GBTC, which was once a trust correlated to the Bitcoin price, has long traded at a discount. The outflow of capital could come from investors who had bet on a readjustment of the GBTC price relative to that of BTC, and realized profits all the more significant with the rise in its price of over 300% since December 2022.

What’s more, it’s plausible that GBTC holders will head for competitors offering lower fees. The other 2 leading Bitcoin spot ETFs, BlackRock’s IBIT and Fidelity’s FBTC, offer annual fees of 0.25%, compared with 1.5% for Grayscale’s GBTC.

Related Posts

Leave a Comment