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Grayscale’s Bitcoin ETF Faces Significant Outflows as Halving Approach
Grayscale’s spot Bitcoin ETF has seen significant withdrawals over the past five days, amid anticipation of the upcoming Bitcoin halving—a critical event occurring every four years that reduces the rate at which new Bitcoins are generated, aiming to preserve the asset’s scarcity.
Recent data from SoSoValue indicates that Grayscale’s Bitcoin Trust (GBTC) has experienced outflows totaling $89.9 million, with the fund’s net outflows since January reaching $1.6 billion. Across the sector, the total outflows from all ten spot Bitcoin ETFs amounted to $4.3 million. Despite these market movements, ETFs offered by Fidelity and BlackRock managed to attract investors, with Fidelity’s FBTC achieving net inflows of $37.3 million, while BlackRock’s IBIT attracted $18.7 million.
A notable shift occurred on April 18, marking a rare instance where BlackRock saw less investor inflow compared to its competitors in the spot Bitcoin ETF market.
Grayscale’s Market Share Drops by Half
Despite its early lead, having launched ten years prior to its competitors, GBTC’s market dominance has substantially waned. According to a report from crypto.news, Grayscale’s assets under management (AUM) have plummeted by 50% within just four months, currently standing at under $20 billion. In contrast, BlackRock has continued to draw significant investor interest with over $17 billion in AUM.
Industry experts, including Bloomberg’s Eric Balchunas, suggest that the high volume of withdrawals from GBTC could be linked to broader industry challenges, such as the bankruptcy filings of major firms like FTX and Genesis. Additionally, Grayscale’s relatively high fund fee of 1.5% is considered another factor driving the fund’s liquidations.
In a move to address these challenges and regain market traction, Grayscale CEO Michael Sonnenshein announced plans to gradually reduce fees. The firm is also exploring the launch of a Bitcoin Mini Trust ETF, which would offer lower fees and potentially attract more investors.
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