Even with the departure of almost $7 billion from Grayscale’s GBTC, the AUM remains a staggering $23 billion. While outflows from Grayscale’s spot Bitcoin ETF have continued to moderate, the cryptocurrency asset manager believes there is still potential for more losses.
The total amount of money that has left the Grayscale Bitcoin Trust (GBTC) since it changed to a spot Bitcoin ETF on February 16th has hit $7 billion, according to data from Bianco Research and Farside. Even if the rate of outflow has significantly decreased, some observers—including Nate Geraci, President of ETF Store—believe the bleeding may not be stopped.
With $5.64 billion departing GBTC by the end of the month, January witnessed the biggest amount of the exodus, although February has only seen outflows of $1.37 billion thus far.
Jim Bianco, the founder of Bianco Research and a veteran Wall Street analyst and commentator, stated on February 18 on X that he believes a large portion of the withdrawal is the result of investors rearranging their portfolios and switching to Bitcoin ETFs with cheaper fees.
He continued by saying that while Grayscale continues to charge 150 basis points, the recently released batch of ETFs has lowered their costs to between 0 and 12 bps.
Bianco provided an additional explanation for the ongoing withdrawal from GBTC: at the time BlackRock filed for its spot ETF in June 2023, the fund was trading at a significant discount to the market price of BTC, or about 44% less than the value of Bitcoin.
Additional harm might also result from a judge’s recent approval of a ruling enabling bankrupt cryptocurrency lender Genesis to liquidate a portion of its holdings in Grayscale.
Genesis owned shares in GBTC valued at almost $1.6 billion, according to court filings.
