Grayscale’s Bitcoin Trust (GBTC) has experienced a decline in withdrawal volumes, reaching its lowest point in the past few days.
Data from BitMEX Research reveals that on February 23, GBTC had withdrawals of $44.2 million, marking the lowest daily volume since its conversion from an over-the-counter product to an exchange-traded fund (ETF) on January 11.
In January, GBTC reported total withdrawals of $5.64 billion, with a significant $640 million being withdrawn on January 22 alone. However, in February, the outflows have decreased, amounting to $1.8 billion so far. Since its inception, GBTC has witnessed a total withdrawal of $7.4 billion.
In comparison, BlackRock’s IBIT has garnered over $6.6 billion in investments since its launch, followed by Fidelity’s FBTC with over $4.7 billion in capital. The third position is held by ARK 21Shares, which has seen inflows of $1.4 billion over the same period.
It was expected that there would be a significant exit from GBTC after the approval of the spot Bitcoin ETF by the United States Securities and Exchange Commission on January 10. This allowed GBTC holders to convert and redeem their shares, whereas previously they had to sell shares on the secondary market to exit their positions.
Analysts suggest that investors have also been rebalancing their portfolios and shifting towards Bitcoin ETFs with lower fees in recent weeks. GBTC charges an annual management fee of 1.5%, while other issuers charge as little as 0.19%.
Grayscale’s Bitcoin fund may face another challenge as the bankrupt crypto firm Genesis Global Holdco has been granted court permission to sell $1.3 billion worth of GBTC shares to reimburse investors.
Despite the significant outflows, Grayscale’s fee structure may help offset the losses. “They can have their assets reduced by up to 90% and still make more profit than all of the other issuers combined,” commented Nate Geraci, president of ETF Store, on X (formerly Twitter).
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