Grayscale’s GBTC Outflows Reach $7 Billion, But Data Indicates Slowing Pace
Over $7 billion has now been withdrawn from Grayscale’s GBTC, yet there remains $23 billion in AUM. The crypto asset manager, Grayscale, continues to witness a deceleration in outflows from its Bitcoin ETF, although industry observers believe there’s still room for further bleed. According to data from Bianco Research and Farside, the total capital withdrawal from Grayscale Bitcoin Trust (GBTC) since its conversion to a Bitcoin ETF on February 16 has reached $7 billion. However, while the withdrawal rate has significantly decreased, observers, including ETF store president Nate Geraci, suggest the outflow may not be over yet.
January saw the highest migration, with $5.64 billion exiting GBTC by month’s end. February, so far, has only seen $1.37 billion in outflows. Jim Bianco, founder of Bianco Research and a former Wall Street analyst and commentator, believes in a February 18 X post that most outflows result from investors rebalancing their portfolios and shifting towards Bitcoin ETFs with lower fees.
He noted that the newly launched batch of ETFs has reduced their fees to between 0 to 12 basis points, while Grayscale still charges 150 bps. Bianco offered another reason for continuing withdrawals from GBTC, trading at a significant discount to BTC’s market price, nearly 44% off when BlackRock registered for its ETF in June 2023.
Bianco mentioned that significant funds are flowing into cheaper Bitcoin and added that when Grayscale converted to an ETF on January 11, 2024, they began closing this arbitrage trade as their goals were achieved. Meanwhile, Gracci believes it’s still early, and asset bleed will continue, suggesting they could cut their assets by about 90% and still earn more than the total of other issuers. He also believes Grayscale might launch a mini GBTC next, a separate and new Bitcoin ETF with significantly lower fees.
Further bleed might also occur following a recent judge’s order allowing the bankrupt crypto lender Genesis to sell part of its investment in Grayscale. Court documents show Genesis had about $1.6 billion in shares in GBTC, Grayscale Ethereum Trust, and Grayscale Ethereum Classic Trust.
