Grayscale Holdings Dip Below $20 Billion Amid ETF Outflows

Grayscale digital currency investment vehicles, particularly its Ethereum and Bitcoin exchange-traded funds (ETFs), have faced a substantial reduction in their asset base. Recent data reveals that Grayscale’s total holdings have now fallen below the $20 billion mark. 

This decline is primarily attributed to consistent outflows from its cryptocurrency ETFs. On September 6, the firm’s Ethereum Trust (ETHE) and Bitcoin Trust (GBTC) recorded net outflows of $10.7 million and $52.9M respectively.

Grayscale GBTC Outflows Hit $280M, Assets Fall Below $20B

According to the latest data from SoSoValue, Grayscale Bitcoin Trust (GBTC) experienced an outflow of $280 million in the past week, and $52.9 million on Friday alone. This substantial withdrawal has contributed to a sharp decline in the fund’s overall asset value.

More so, the total outflows from Bitcoin ETFs over the past week have accumulated to an extensive $706 million.

Concurrently, data from Arkham show that the crypto asset manager’s total holdings has now dipped below the $20 billion threshold. This downturn in asset value reflects a broader trend of decreasing enthusiasm for Bitcoin ETFs amidst current crypto market crash.

The ongoing market retreat has been particularly pronounced for GBTC, which, despite its pioneering status in the exchange-traded funds sphere, has struggled to maintain its asset base. 

ETHE Witnesses $10.7M Outflow Amid Market Shifts

In addition, Grayscale Ethereum Trust (ETHE) has also seen withdrawals, with $10.7 million exiting the fund on September 6. This has further strained Grayscale’s asset management, with ETHE being the only Ethereum ETF experiencing outflows on the day.

However, unlike its Bitcoin counterpart, the ETHE had experienced some inflows earlier in the year, but the recent trend has been predominantly negative.

The outflows from ETHE come at a time when Ethereum itself has faced market challenges, including price volatility and competition from other blockchain networks. These factors have influenced investor sentiment, leading to decreased deposits and increased redemptions. 

Market Outlook and Investor Sentiment

As the  crypto asset manager ETFs endure these financial pressures, the overall market for crypto funds is showing signs of contraction. This period of market correction is affecting not just Grayscale but other exchange-traded funds providers as well.

Market analysts suggest that this downturn might lead to a consolidation phase in the cryptocurrency investment product market.

Despite these significant outflows, on-chain data support a potential reversal in markets. For instance, after the Friday’s weak Jobs data led to Bitcoin price crash and $300 million in liquidations, data has signalled at a potential price correction.

At the same time, ETH price has shown potential for a crash following $45M ETH selloff and weak US jobs data as reported by CoinGape. BTC price was trading at $54,781 at press time while Ethereum price was $2,305.