Grayscale, the world’s largest crypto asset manager, has witnessed a significant decrease in its Bitcoin (BTC) holdings on GBTC since it converted into an ETF in mid-January. On March 4, GBTC experienced its 36th consecutive day of outflows, with 5,450 BTC or $368 million leaving the trust. This brings the total outflow to $9.26 billion since its conversion, according to BitMEX Research. Prior to the conversion, Grayscale held around 620,000 BTC, according to Coinglass.
The launch of Grayscale’s spot Bitcoin ETF allowed investors to redeem their shares for Bitcoin, which was not possible in the previous structure. Additionally, GBTC has higher fees compared to other ETFs such as BlackRock’s IBIT and Fidelity’s FBTC. Currently, the GBTC fund holds 420,682 BTC worth approximately $28.8 billion.
Market observers have been speculating about when GBTC’s “Bitcoin bleed” will come to an end. The outflows slowed in late January and February, leading some analysts to suggest that they may be nearing an end. However, in mid-February, bankruptcy courts allowed Genesis, a crypto lender, to liquidate approximately $1.3 billion worth of GBTC shares to reimburse investors.
Bloomberg ETF analyst Eric Balchunas previously speculated that the bleed would stop once GBTC exceeds 25% of outstanding shares. However, a self-selected poll indicated that most respondents expect it to happen in the 35-50% range.
Meanwhile, the other nine spot Bitcoin ETFs have been exceeding expectations during the sustained Bitcoin rally. On March 4, these ETFs had the second-largest volume day with around $5.5 billion. The BlackRock IBIT fund had approximately $2.4 billion in daily volume, and its assets under management have surpassed $11 billion. Each of the new ETFs has also seen a volume increase of over 30% in just six days, which is expected to continue the flow of investments.
March 4 was also a record day for Fidelity, with $404.6 million in inflows, offsetting the GBTC outflow. The Bitwise Bitcoin ETF (BITB) also experienced a solid day with $91 million of inflows, its highest since Feb. 15.