Grayscale, the largest crypto asset manager in the world, has experienced a significant decrease in its Bitcoin holdings since it transformed into an ETF in January. On March 4, GBTC witnessed its 36th consecutive day of outflows, with 5,450 BTC or $368 million leaving the trust. Since the conversion, a total of $9.26 billion has been withdrawn, according to BitMEX Research.
Before the ETF conversion, Grayscale held approximately 620,000 BTC, as reported by Coinglass. However, the launch of Grayscale’s spot Bitcoin ETF allowed investors to redeem their shares for Bitcoin, which was not previously possible. Additionally, GBTC’s higher fees compared to other ETFs like BlackRock’s IBIT and Fidelity’s FBTC have contributed to the outflows.
Currently, the GBTC fund holds 420,682 BTC, valued at approximately $28.8 billion, according to its website and portfolio.
Market observers have been speculating about when GBTC will cease its “Bitcoin bleed.” While outflows slowed in late January and February, the bankruptcy courts permitted Genesis, a crypto lender, to liquidate around $1.3 billion worth of GBTC shares in mid-February to repay investors.
Bloomberg ETF analyst Eric Balchunas previously suggested that the bleed would stop once GBTC sees outflows of 25% of its outstanding shares. However, a poll on X indicated that most respondents believed it would happen in the 35-50% range.
Meanwhile, the nine other spot Bitcoin ETFs have been performing exceptionally well amid the ongoing Bitcoin rally. March 4 marked the second-largest volume day for these ETFs, with approximately $5.5 billion traded. The BlackRock IBIT fund alone had a daily volume of around $2.4 billion and now manages over $11 billion in assets.
Each of the new ETFs has also experienced over a 30% increase in volume in just six days, which is expected to maintain the positive flow.
In addition, Fidelity recorded a record day of inflows on March 4, with $404.6 million, surpassing the GBTC outflows. The Bitwise Bitcoin ETF (BITB) also saw strong inflows of $91 million, its highest since February 15.
Overall, the Bitcoin ETF market has been thriving, with significant volumes and inflows seen across various funds.