GBTC Records $10 Billion Net Outflows Within Two Months Post ETF Conversion

Grayscale Investments' Grayscale Bitcoin Trust ETF (GBTC) has witnessed substantial net outflows, exceeding $10 billion since its conversion to an ETF on January 11. On Thursday alone, GBTC experienced outflows of $375 million, as reported by BitMEX Research.

GBTC's High Fee and Persistent Outflows Compared to Competing US Bitcoin ETFs

GBTC stands out among the ten US spot bitcoin ETFs due to its relatively high fee of 1.5%, compared to competitors like BlackRock's iShares Bitcoin Trust (IBIT) and Fidelity's Wise Origin Bitcoin Fund (FBTC), which charge fees of 0.25%. While IBIT has attracted net inflows of $9.7 billion and FBTC has seen inflows of $6 billion since their launch nearly two months ago, GBTC has faced persistent outflows.

GBTC Outflows Surge to $600 Million Despite Brief Respite

Although GBTC experienced a brief respite with outflows dropping to $22 million on February 26, the trend quickly reversed, with outflows surging to nearly $600 million on February 29. The fund has witnessed average daily net outflows of $338 million during the first four days of this week.

Speculation Arises Over GBTC Outflows: Genesis Bankruptcy Link Unconfirmed

Some industry observers speculate that the recent uptick in outflows could be linked to bankrupt lender Genesis, which received approval to sell approximately $1.6 billion worth of GBTC shares earlier this month. However, a spokesperson for Genesis has not provided comment on the matter.

GBTC's Assets Hold Steady at $27 Billion Amid Bitcoin's Price Surge

Despite the significant outflows, GBTC's assets under management have only slightly decreased from around $28 billion to $27 billion over the past two months, largely due to the recent surge in BTC's price. Bitcoin reached an all-time high above $69,000 on Tuesday before retracting to around $60,000 later the same day. As of Friday at 6 a.m. ET, the price of Bitcoin stood at approximately $67,400, marking an increase of more than 8% from the previous week.

In summary, GBTC's transition to an ETF has been marked by substantial outflows, potentially influenced by its relatively high fees compared to competitors. Despite these challenges, the fund's assets under management have remained relatively stable, buoyed by Bitcoin's recent price surge.