The Grayscale Bitcoin exchange-traded funds (ETF), GBTC, continues to see significant outflows, with over $166 million and more than 2,500 Bitcoin (BTC) withdrawn from the fund’s holdings on Friday, April 12.
According to data from Farside Investors, outflows from GBTC have now reached over $16.2 billion since the launch of the Bitcoin ETF in January. Since April, daily outflows from the Grayscale Bitcoin Trust (GBTC) have been fluctuating between $75 million and $300 million.
On the other hand, inflows into Bitcoin ETFs have been minimal, indicating a decline in investor engagement. GBTC recorded substantial outflows of $767 million this week, contributing to overall negative flows into Bitcoin ETFs.
BlackRock has maintained strong support as assets under management for IBIT Bitcoin ETF have exceeded $15 billion, narrowing the gap with Grayscale’s Bitcoin reserves. A significant portion of GBTC outflows has likely flowed into BlackRock.
Grayscale CEO Michael Sonnenshein suggested earlier this week that outflows from the Grayscale Bitcoin Trust might be stabilizing, indicating optimism among traders and investors. However, current data suggests that the situation may not align with this optimism.
One primary reason behind the massive GBTC outflows is the high management fee charged by the fund. However, Sonnenshein has been hesitant to cut the fees despite losing flows to competitors. GBTC has the highest management fees out of all U.S. Bitcoin ETFs, pinned at 1.5% per year compared to the 0.30% average of its competitors.
Sonnenshein noted that markets often show high excitement when commodity or thematic exposure products, like Grayscale Bitcoin Trust, first emerge. However, these products mature over time, leading to market consolidation as investors focus on a few offerings.
According to Farside data, GBTC saw outflows of $17.5 million on April 10, a significant decrease from the $154.9 million outflows recorded on April 9. The previous low was on February 26 when GBTC outflowed $22.4 million. The daily average outflows for GBTC over the past four months have been $257.8 million.
GBTC launched in 2015 and converted to an ETF in January, along with the launch of nine other Bitcoin ETFs after Grayscale won a lawsuit against the Securities and Exchange Commission, forcing a review of its denied GBTC conversion bid.
Bankrupt crypto lending firm Genesis recently sold approximately 36 million GBTC shares to acquire 32,041 Bitcoin.