The Grayscale Bitcoin exchange-traded funds (ETF), GBTC, is facing a significant decrease in assets, with over $166 million and more than 2,500 Bitcoin withdrawn from the fund’s holdings on Friday, April 12th.
According to Farside Investors data, outflows from GBTC have now reached over $16.2 billion since the launch of the Bitcoin ETF in January. In April, the daily outflows from the Grayscale Bitcoin Trust (GBTC) have been fluctuating between $75 million and $300 million.
On the other hand, there have been minimal inflows into Bitcoin ETFs, indicating a decline in investor engagement. GBTC experienced significant outflows of $767 million this week, contributing to overall negative flows into Bitcoin ETFs.
BlackRock has been gaining strong support, with assets under management for IBIT Bitcoin ETF exceeding $15 billion, narrowing the gap with Grayscale’s Bitcoin reserves. It is likely that a significant portion of the outflows from GBTC has flowed into BlackRock.
Grayscale CEO Michael Sonnenshein suggested earlier this week that the outflows from the Grayscale Bitcoin Trust may be stabilizing, indicating optimism among traders and investors. However, the current data suggests that the situation may not align with this optimism.
One of the primary reasons for the significant outflows from GBTC is the high management fee charged by the fund. Despite losing flows to competitors, Sonnenshein has been hesitant to cut the fees. GBTC has the highest management fees out of all U.S. Bitcoin ETFs, with an annual fee of 1.5% compared to the 0.30% average of its competitors.
Sonnenshein noted that markets often show high excitement when commodity or thematic exposure products like Grayscale Bitcoin Trust first emerge. However, as time passes, these products mature, leading to market consolidation as investors focus on a few offerings.
According to Farside data, GBTC saw outflows of $17.5 million on April 10th, a significant decrease from the $154.9 million outflows recorded on April 9th. The previous low was on February 26th when GBTC saw outflows of $22.4 million. The average daily outflows for GBTC over the past four months is $257.8 million.
GBTC was launched in 2015 and converted to an ETF in January, along with the launch of nine other Bitcoin ETFs after Grayscale successfully won a lawsuit against the Securities and Exchange Commission, forcing them to review GBTC’s conversion bid, which they initially denied.
Bankrupt crypto lending firm Genesis recently sold approximately 36 million GBTC shares to acquire 32,041 Bitcoin.