Grayscale Bitcoin Trust Sees $2.14 Billion in Withdrawals Following ETF Transition

Investors have pulled out more than 52,000 Bitcoin, equivalent to $2.14 billion, from Grayscale Bitcoin Trust shortly after its transition to an ETF, as reported by the asset management firm. Grayscale This outflow occurred during the first week following the fund's transformation into an ETF.

With the green light from the US Securities and Exchange Commission (SEC) allowing its change from a trust setup to an ETF, Grayscale presently manages a stash of 566,973 BTC, roughly valued at $23.21 billion, according to Lookonchain.

The notable withdrawals from Grayscale stand in sharp contrast to the other nine spot Bitcoin ETFs, which collectively enjoyed nearly $3.8 billion in new investments.

In contrast, other spot Bitcoin ETFs In fact, these funds have reported encouraging net inflows, including the iShares Bitcoin Spot ETF, which currently holds 33,431 BTC worth around $1.37 billion. Fidelity’s Bitcoin Spot ETF is at 24,857 BTC, approximately translating to $1.02 billion, while Bitwise’s Bitcoin Spot ETF has a total of 10,152 BTC, or about $415 million. BlackRock’s The transition to a Grayscale Bitcoin Trust ETF offers a clearer lens into the performance metrics of GBTC, as the flow information delivers a more holistic view of its impact post-SEC approval.

Grayscale has been a significant player in the Bitcoin investment scene for over ten years, but the landscape is shifting as new competitors enter the market with innovative products.

Zach Pandl, the managing director of research at Grayscale, highlighted that the overall net inflows into Bitcoin-linked investment vehicles are essential to monitoring price trends. He pointed out that the focus should lie on total inflows instead of merely shifting investments among different products.

The recent withdrawals from Grayscale's ETF, however, come as no real shock. Bloomberg Intelligence had predicted potential outflows of more than $1 billion shortly after SEC approval, with many investors looking to shift their assets to more competitively priced spot Bitcoin ETFs.

GBTC, known for its 1.5% management fee, remains the costliest ETF in the United States that directly invests in Bitcoin. In contrast, the VanEck Bitcoin Trust, which is the second-most expensive option, charges a far lower fee of 0.25%.

Managing Director Nikolaos Panigirtzoglou previously shared his perspectives on Bitcoin’s price dynamics via LinkedIn, emphasizing the effects of newly launched spot Bitcoin ETFs and the recent outflows from Grayscale’s holdings. costliest Panigirtzoglou noted that Bitcoin's price has fallen by over 10% since the introduction of these spot ETFs. Following an initial surge above $47,000 in anticipation of ETF approvals, the price has since retracted, and as of now, it's hovering around $40,823.

GBTC Outflows Affect Bitcoin Price 

J.P. Morgan He commented, \"The rapid withdrawal from Grayscale’s GBTC has played a role in this downturn. Investors who acquired GBTC at a discount to NAV over the past year, hoping for its eventual ETF conversion, are now completely exiting the Bitcoin market instead of simply moving to lower-cost spot Bitcoin ETFs,\" stated Nikolaos Panigirtzoglou, Managing Director over at J.P. Morgan.

Previously, he estimated that around $3 billion was flowed into GBTC via the secondary market in 2023, driven by its discounted pricing. With $2.14 billion already withdrawn, there's potential for further exits as investors take profits on GBTC, suggesting even more selling pressure on Bitcoin in the coming weeks.

The withdrawals from Grayscale, following the SEC's pivotal endorsement, represent a stark divergence from the positive trends of competing spot Bitcoin ETFs, hinting at investor desires for more lucrative opportunities and consequently influencing Bitcoin prices.

Securities and Exchange Commission Bitcoin Please be aware that the content provided on this page is not intended to be construed as legal, tax, investment, financial, or any type of professional advice. Always invest only what you can afford to lose and consider seeking independent financial counsel should you have any uncertainties. For additional details, we recommend reviewing the terms, conditions, and help resources provided by the issuer or advertiser. MetaversePost is dedicated to upholding accurate and unbiased journalism, but market conditions can fluctuate unpredictably.

Alisa writes for Cryptocurrencylistings, diving deep into cryptocurrency, zk proofs, investments, and the broad domain of Web3. With a sharp focus on the latest trends and technologies, her reporting aims to both inform and engage readers within the dynamic landscape of digital finance.