On Thursday, U.S. spot bitcoin exchange-traded funds (ETFs) marked their fourth day of inflows, accumulating 7.3 million. Grayscale’s Bitcoin Trust (GBTC) also experienced its fourth day of inflows, gaining .6 million during the trading sessions. Spread Between IBIT and GBTC Bitcoin Reserves Grows Thinner U.S. spot bitcoin ETFs continued their streak this week with four […]
Bitcoin News
GBTC’s Heavy Withdrawals Result in Net $11.3M Outflow in US Bitcoin ETFs
The U.S. spot bitcoin exchange-traded funds (ETFs) witnessed an outflow of .3 million during Thursday’s trading sessions, following an inflow of .5 million on Wednesday. Although the majority of funds experienced inflows on Thursday, significant outflows from Grayscale’s Bitcoin Trust (GBTC) eclipsed these gains. Grayscale’s Losses Contrast With Gains On Thursday, GBTC experienced outflows that […]
Bitcoin News
From Peak to Present: GBTC’s Bitcoin Holdings Decrease by 266,827 BTC in 71 Days
As of March 22, the bitcoin holdings of Grayscale’s Bitcoin Trust (GBTC) have diminished by 27,917.37 compared to its status three days prior, now amounting to 350,252 bitcoin valued at approximately .2 billion. Since evolving into an exchange-traded fund (ETF) listed on public exchanges, GBTC has shed billions in bitcoin over the preceding 71 days. […]
Bitcoin News
GBTC’s Mixed Fortune: 54% Market Share in ETF Trade Volume Accompanied by $2 Billion BTC Exodus
Over a span of six days in the U.S. market, nine newly launched spot bitcoin exchange-traded funds (ETFs), along with the recently revamped GBTC, collectively saw a trading volume of .53 billion. GBTC, commanding the majority of this trade volume, experienced a substantial reduction in its bitcoin holdings. In just the past 24 hours, the trust shed over 14,300 bitcoin, decreasing its total holdings to 566,973 bitcoin.
Billion in Bitcoin Depart Grayscale’s GBTC Since Jan. 12
GBTC, now recognized as a spot bitcoin ETF, maintains a considerable reserve of bitcoin (BTC). Since transitioning into a publicly traded ETF, the trust has experienced notable outflows. On Thursday, GBTC’s holdings decreased by 10,823.86 BTC, and following the trading sessions on Friday, the fund saw a further reduction of 14,300.52 BTC. Cumulatively, since Jan. 12, 2024, the trust has seen an outflow of 50,106.59 BTC, valued at slightly above billion, from its reserves.
WHEN WILL THE BLEEDING STOP? I don’t know, but this this is some serious daily outflows for The Nine to have to battle every single day.. they’ve done a great job so far but damn its a lot to ask.. pic.twitter.com/LqwPRETrQf
— Eric Balchunas (@EricBalchunas) January 19, 2024
Several factors contribute to the intense selling of GBTC. Initially, GBTC shareholders might have felt constrained when the shares, initially trading at a premium to their net asset value (NAV), abruptly transitioned to a discount. This discount began in February 2021 and persisted almost until the onset of this year. Long-term investors might have been biding their time, waiting for an opportunity to sell once the discount narrowed. Additionally, investors who speculated that the discount would diminish and bought GBTC at a lower price may now be offloading their shares for substantial gains.
Another possible reason for the sell-off is that some investors in GBTC are exploring alternatives with more competitive management fees, given that Grayscale’s GBTC has the highest fees in its category. On the other hand, Grayscale’s bitcoin trust has seen the highest volume out of all nine newly launched ETFs with .97 billion of the .53 billion aggregate. This means GBTC trades accounted for 54.26% of all the trading action spot bitcoin ETFs recorded.
Before the mass approvals on Jan. 11, 2024, the prevailing narrative largely centered on the expected inflows, with little attention paid to potential outflows from GBTC. However, a modest semblance of equilibrium has emerged, as IBIT and FBTC now possess a combined total of 53,479 BTC, slightly surpassing the outflows GBTC experienced since Jan. 12.
Additionally, the cluster of ETFs vying with GBTC, IBIT, and FBTC have also witnessed growth in their BTC reserves, though not even close to a striking extent. Despite IBIT and FBTC holding significant amounts of bitcoin, these funds, along with the seven other ETFs, remain substantially smaller in comparison to GBTC’s vast reserve of hundreds of thousands of bitcoin.
What do you think about the outflow GBTC has seen since Jan. 12? Share your thoughts and opinions about this subject in the comments section below.
GBTC’s Closing NAV Discount and Steep Fees Trigger Outflows, ETF Analyst Expects ‘More Over Time’
Last week, the U.S. Securities and Exchange Commission (SEC) greenlit the debut of 11 diverse spot bitcoin exchange-traded funds (ETFs), which, in their initial two days on the market, experienced a substantial .65 billion in trading volume. Concurrently, while a host of new entrants enjoyed strong inflows, Grayscale’s GBTC encountered notable outflows, coinciding with the fund’s discount to net asset value reaching its lowest point since February 2021.
Reduced NAV Discount Prompts GBTC Outflows
On Saturday, Eric Balchunas, the senior ETF analyst for Bloomberg, shared insights on the “nine newborn” spot bitcoin exchange-traded funds (ETFs), which have impressively gathered .4 billion in cash. Balchunas observed that this surge in capital markedly outstrips the 9 million outflow from the Grayscale Bitcoin Trust (GBTC), leading to a net investment growth of 9 million. He further noted that these trades boasted an average premium of 20 basis points.
Following his analysis, when queried about the significant withdrawal from GBTC, Balchunas responded:
Lots of [traders] came in to play the discount closing so they [are] leaving to take profits, there’s also captive [average investors] who may have decided to stomach the tax hit in order to flee the 1.5% fee … I’d expect more [over] time.
Balchunas’ observations resonate with the recent outflows from Grayscale Bitcoin Trust (GBTC), as onchain analysts noted a significant movement of 4,000 BTC, valued at 5 million, exiting GBTC’s bitcoin wallet holdings on Friday. This coincides with GBTC’s discount to its net asset value (NAV) reaching its lowest point since February 2021, a stark contrast to its prior premium status before February 23, 2021. Alongside this shift to a more normalized NAV discount, Grayscale’s ETF management fees stand out as the highest among the 11 ETFs approved last week.
Notably, seven of these funds boast management fees below 0.30%, with Bitwise’s BITB leading at a minimal 0.20% fee. Ark’s ARKB, Fidelity’s FBTC, and Blackrock’s IBIT each offer a competitive 0.25% fee, matched by Valkyrie’s BRRR and Vaneck’s HODL. Close behind is Franklin Templeton’s EZBC at 0.29% and Wisdomtree’s BTCW at 0.30%, while Invesco’s fee is slightly higher at 0.39%. Hashdex’s 0.94% fee for its DEFI fund is the only one approaching GBTC’s substantial 1.5% management fee, suggesting that the more favorable fees of these new funds could be a factor in investors’ shift away from GBTC.
Furthermore, an appealing incentive for investors in the U.S. is the temporary waiver of management fees offered by seven of the 11 newly approved spot bitcoin ETFs, allowing early investors to participate without any fees for a limited time. This is a significant change from when GBTC, traded over-the-counter (OTC), charged a 2% management fee, which was reduced in anticipation of its ETF transition. As new entrants strive to emulate Grayscale’s decade-long leadership in this domain, it’s noteworthy that GBTC still holds a formidable 618,000 BTC, dwarfing the recent inflows to these new ETFs by a long shot.
What do you think about GBTC’s outflows? Share your thoughts and opinions about this subject in the comments section below.
GBTC’s Discount Narrows Amid Bitcoin’s Downturn, But A Bullish Trend Is Coming?
The Grayscale Bitcoin Trust (GBTC) share price has again made headlines. Its premium or discount to Bitcoin’s net asset value (NAV), often viewed as an indicator of institutional sentiment towards the cryptocurrency, has displayed a notable trend recently, even amid the prevailing bearish atmosphere.
GBTC’s Evolving Price Dynamics
The phenomenon of GBTC’s share price inching closer to Bitcoin’s market price is worth noting. The correlation between the two has been historically significant, with price differences often shedding light on broader market sentiments.
According to data from CoinGlass, a renowned crypto monitoring platform, the GBTC shares were recorded trading at a 17.17% discount to the BTC/USD rate as of September 9th, the last update.
Such levels haven’t been witnessed since December 2021, highlighting a potentially shifting sentiment in the market. The so-called “GBTC Premium,” previously a surplus, has been a discount to the net asset value for a while now.
The shift was drastic at one juncture that the differences neared roughly 50% last November. Such variance has led to a divergence between GBTC’s performance and Bitcoin’s price strength, especially as Bitcoin revisits price zones it hasn’t seen in the past six months.
What This Could Mean For Bitcoin
The narrowing of GBTC’s discount isn’t just an isolated event. It paints a broader picture of potential market sentiment shifts and future movements.
Notably, a shrinking discount can be interpreted as a sign of growing institutional interest, as the GBTC serves as a prominent avenue for institutions to gain exposure to Bitcoin without directly holding the asset. If institutional interest is indeed on the rise, this could bode well for Bitcoin’s mid to long-term price outlook.
Nevertheless, Bitcoin is currently seeing a downtrend. The asset has plunged nearly 15% in the past month and 2% in the last 24 hours. As a result, its price has fallen below the recently established ,000 mark, trading at ,175 at the time of writing.
According to Cryptocon, a trader and analyst, Bitcoin might see a weaker performance this month as October often brings a turnaround and more decisive price action.
September is historically a pretty bad month for #Bitcoin, that’s just the facts.
October is historically very bullish.
But maybe, it’s November that will bring the turn around we need according to our performance since the halving dates.
To be… pic.twitter.com/Olg0XHVxKG
— CryptoCon (@CryptoCon_) September 11, 2023
This perspective aligns with a prevalent crypto community theory that marks November 28th as a quadrennial “bull run launch” for Bitcoin.
Featured image from iStock, Chart from TradingView