Grayscale’s Bitcoin Trust (GBTC) has experienced a decline in withdrawals, reaching its lowest point in the past few days, indicating a slowdown in the volume of funds being withdrawn. Data from BitMEX Research shows that on February 23, GBTC had withdrawals amounting to $44.2 million, the lowest daily volume since its conversion to an exchange-traded fund (ETF) on January 11, from being an over-the-counter product.
By the end of January, GBTC had reported total withdrawals of $5.64 billion, with a significant $640 million being withdrawn on January 22 alone. In February, there has been a decrease in outflows, totaling $1.8 billion so far. Since its inception, GBTC has seen a total withdrawal of $7.4 billion.
In comparison, BlackRock’s IBIT has gathered over $6.6 billion in investments since its launch, followed by Fidelity’s FBTC with over $4.7 billion in capital. The third position is held by ARK 21Shares, with inflows of $1.4 billion during the same period.
The significant decrease in GBTC outflows was expected. The approval of the spot Bitcoin ETF by the United States Securities and Exchange Commission on January 10 allowed GBTC holders to convert and redeem their shares. Previously, investors had to sell shares on the secondary market to exit their positions.
Analysts suggest that investors have also been rebalancing their portfolios and moving towards Bitcoin ETFs with lower fees in recent weeks. GBTC charges an annual management fee of 1.5%, whereas other issuers charge as little as 0.19%.
Grayscale’s Bitcoin fund may face another challenge in the future. Recently, the bankrupt crypto firm Genesis Global Holdco was granted court permission to sell $1.3 billion worth of GBTC shares to compensate investors.
However, the significant outflows may be offset by Grayscale’s fee structure. ETF Store president Nate Geraci mentioned on X (formerly Twitter), “They can have assets reduced by about 90% and still generate more revenue than all of the other issuers combined.”
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