Conversely, the meagre inflows into Bitcoin ETFs suggest a decline in investor participation. On Friday, April 12, more than 2,500 Bitcoin and over $166 million were taken out of the Grayscale Bitcoin exchange-traded funds (GBTC) holdings. These withdrawals are still rather substantial.
Since the Bitcoin ETF’s inception in January, outflows from GBTC have already topped $16.2 billion, according to statistics from Farside Investors. The daily withdrawals from the Grayscale Bitcoin Trust (GBTC) have been varying between $75 million and $300 million since April.
However, there hasn’t been much money flowing into Bitcoin ETFs, which suggests that investor interest is waning. Significant withdrawals totaling $767 million were recorded by GBTC this week, which added to the overall decline in flows into Bitcoin ETFs.
While Grayscale’s Bitcoin reserves are getting closer, BlackRock has remained steadfast in its support as the assets under management for the IBIT Bitcoin ETF surpass $15 billion. BlackRock has probably received a sizable share of GBTC outflows.
This week, Grayscale CEO Michael Sonnenshein made a suggestion that withdrawals from the Grayscale Bitcoin Trust might be levelling off, indicating hope among traders and investors. Present research, however, suggests that this optimism may not be supported by the circumstances.
The fund’s hefty management fee has been a major factor in the significant outflows of GBTC. In spite of losing the flows to rivals, Sonnenshein has been reluctant to lower the fees. Out of all US Bitcoin ETFs, GBTC has the highest management costs, fixed at 1.5% annually, while the average for its rivals is 0.30%.
Sonnenshein pointed out that when commodity or theme exposure products, such as Grayscale Bitcoin Trust, initially appear, markets frequently show a lot of excitement. But over time, when investors narrow their attention to a select few products, these products mature and the market becomes more concentrated. Farside data shows that on April 10, GBTC experienced withdrawals of $17.5 million, which is a considerable drop from the $154.9 million outflows that were noted on April 9.
When GBTC outflowed $22.4 million on February 26, it reached its prior low. Over the course of four months, the average daily outflow of GBTC has been $257.8 million.
Following Grayscale’s victory in a lawsuit against the Securities and Exchange Commission, which forced the agency to examine a GBTC conversion offer it had rejected, GBTC, which had been launched in 2015, was converted to an ETF in January 2017 with the introduction of nine other Bitcoin ETFs. Recently, the bankrupt cryptocurrency lending company Genesis sold over 36 million GBTC shares in order to buy 32,041 Bitcoin.