Grayscale Bitcoin ETF Faces $1.6B Outflows as Bitcoin Halving Nears

As the Bitcoin halving event approaches, Grayscale’s spot Bitcoin ETF (GBTC) has reported substantial capital withdrawals. In the past five days alone, investors have withdrawn $89.9 million, a net outflow of $1.6 billion since January. This is indicative of growing investor sentiment in the broader market.

However, despite having the first-mover advantage in the Bitcoin ETFs space, Grayscale’s dominance appears to have dwindled. Other new contributors, such as BlackRock and Fidelity, started to capture significant market shares. To illustrate, during the same week, $37.3 million and $18.7 million of net inflows were captured by Fidelity FBTC and BlackRock’s IBIT, solving some liquidity challenges the broader market was facing.

Grayscale GBTC Faces $1.6 Billion Outflows

GBTC is also an exception among leading spot Bitcoin ETF competitors. According to the charts, April 18 brought rare-week outflows to BlackRock, trailing more than $17 billion from investors. As a result, Grayscale’s lighter pockets continued to hold less space, with an AUM of less than $20 billion.

According to Bloomberg’s expert Eric Balchunas, external factors, such as the FTX and Genesis bankruptcy, are likely to have contributed to the considerable GBTC outflows. Others argue that Grayscale’s fund fee is 1.5% higher than most of its competition, which could be discouraging to potential investors.

In light of the company’s struggles, however, Grayscale’s CEO Michael Sonnenshein recently revealed that the fee will be lowered over time and floated the idea of a Bitcoin Mini Trust ETF as a new offering that could attract more investors by delivering Bitcoin exposure at a lower cost.

Bitwise CEO Highlights Stealthy Bitcoin Adoption

The state of play in the broader crypto registration realm is indicative of a cautious but incremental move toward acceptance among finance’s specialist factions. Hunter Horsley, CEO of Bitwise, used the term “stealthy but material” to describe the receptivity of registered investment advisors (RIAs) and multifamily offices to Bitcoin. According to Horsley, these finance institutions are studying deep dives into the Bitcoin market while not disclosing it publicly.

Horsley’s comments come as a report from Bitwise on crypto registration, which uncovered a parallel trend earlier this year. These institutions are beginning to integrate Bitcoin into their portfolios without making public announcements. Meanwhile, the impending Bitcoin halving promises to induce further accommodation on the part of these registrants to relent to Bitcoin market demand.

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