Grayscale Doubles Down on Altcoin Fund Offerings Amid Bitcoin ETF Outflows

Highlights

Grayscale starts offering private placement subscriptions for its altcoin trusts.
GBTC outflows continue surging past $100 million again, the first time this week.
Inflows into other Bitcoin ETFs from BlackRock and Fidelity absorb the GBTC selling pressure.

Following the introduction of spot Bitcoin ETFs in the market, the Grayscale Bitcoin Trust (GBTC) has experienced consistent outflows. Investors are reallocating capital to alternative Bitcoin ETFs offered by BlackRock and Fidelity, which provide cost advantages with lower fees.

Grayscale Opens Private Placement Subscriptions for Altcoin Trusts

According to insights provided by crypto analyst Colin Wu, Grayscale has initiated private placement subscriptions for select cryptocurrency trusts, accessible to accredited investors.

These trusts include Grayscale Bitcoin Cash Trust, Grayscale Chainlink Trust, Grayscale Litecoin Trust, Grayscale Solana Trust, and Grayscale Stellar Lumens Trust. Investors will have the opportunity to subscribe based on the net asset value of each trust.

Grayscale introduced these products to the market over the last few years. It offered institutional players exposure to different crypto assets amid the lack of regulation in the market.

However, one factor that has kept institutional players away from Grayscale products is the high management fee. This is one of the major factors behind the massive outflows witnessed by the Grayscale Bitcoin ETFs over the last month.

After a drop in the GBTC outflows earlier this week, they have gained momentum once again. On Wednesday, the total GBTC outflows stood at $131 million, as per data from Farside investors. However, the net inflows from other big players like BlackRock and Fidelity have outpaced the GBTC outflows, thereby supporting the upward Bitcoin price action.

#Bitcoin spot ETF flows through month one:

+50.6k $BTC of net inflows, including ~150k $BTC being drained from Grayscale.

HUGE. pic.twitter.com/REpsknih3j

— Dylan LeClair 🟠 (@DylanLeClair_) February 9, 2024

Bitcoin ETF Inflows At New Highs

Cameron Winklevoss, co-founder of Gemini, expressed optimism about the impact of Bitcoin ETFs on market dynamics, highlighting their role in reducing available supply. According to Winklevoss, Bitcoin ETFs are currently absorbing ten times more Bitcoin from the market daily than are being newly minted.

He further emphasized that if this trend persists post-Halving, Bitcoin ETFs could potentially remove twenty times more Bitcoin from circulation daily compared to the newly minted supply. Winklevoss conveyed his approval of this development, indicating optimism for the future trajectory of Bitcoin.

However, on Wednesday, February, the Bitcoin ETF inflows tanked by 50% from the highest count a day before. The total inflows into bitcoin ETFs on Wednesday stood at $339 million, down from $631 million a day before.

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Bhushan Akolkar

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets.   He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

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