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Highlights
- BlackRock closes the gap with GBTC in terms of its Bitcoin reserves.
- This week, the total GBTC outflows have skyrocketed past $767 million.
- Grayscale CEO's equilibrium comment stands challenged as GBTC outflows refuse to stop.
The Bitcoin holdings of the Grayscale Bitcoin ETF GBTC continue to deplete with no immediate stopping in sight. On Friday, April 12, the GBTC outflows skyrocketed past $166 million losing over 2,500 Bitcoin from the fund’s holding.
GBTC Outflows Surpass $16 Billion
As per data from Farside Investors, the GBTC outflows have now surpassed a staggering $16.2 billion since the Bitcoin ETF launch earlier this year in January. Throughout this month of April, the daily outflows from the Grayscale Bitcoin ETF GBTC have been volatile with lows of $75 million to the highs of $300 million. On the other hand, the overall inflows into the Bitcoin ETFs have been really subdued showing signs of dropping investor participation.
Inflows to the 9 new bitcoin ETFs, ex. GBTC, were just $572 million this week, the worst week to date. pic.twitter.com/pMzS5gH26I
— Joe Consorti ⚡ (@JoeConsorti) April 13, 2024
On the other hand, the outflows from the GBTC this week have stood at a staggering $767 million. Thus, the overall flows into Bitcoin ETFs this week have been negative with GBTC putting a major dent to it.
On the other hand, BlackRock has stood steadfast with the assets under management for IBIT Bitcoin ETF crossing $15 billion. As a result, BlackRock has widely reduced the gap for Bitcoin reserves with Grayscale. There’s a very high possibility that the majority of the GBTC outflows have been going into BlackRock.
Are Outflows Really Reaching an ‘Equilibrium’?
Earlier this week, Grayscale CEO Michael Sonnenshein suggested that outflows from the Grayscale Bitcoin Trust (GBTC) could be stabilizing after a prolonged period of investor selling. His remarks convey optimism among traders and investors, hinting that the ongoing selling pressure might soon align with buying interest in the market as outflows potentially reach an equilibrium. However, that stands far from true as per the current data.
One of the major reasons behind the massive GBTC outflows has been the high management fee that the fund charges. However, Sonnenshein has been hesitant to cut the fees despite losing the flows to the competitors.
Sonnenshein noted that as time progresses, the products undergo a maturation process, leading to market consolidation as investors increasingly allocate funds to a select few products. “That means fees also come down over time. We’ll reduce fees on GBTC, and that also means that we’re kind of at the end of that first inning of that first wave of adoption,” he said.
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