Grayscale Bitcoin Trust Sees Historic $494 Million Withdrawal

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Georgi Shopov
12 March, 2024, 13:32
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Grayscale Bitcoin Trust Sees Historic $494 Million Withdrawal Amid Declining Holdings and ETF Shift

On March 11, the Grayscale Bitcoin Trust (GBTC) experienced a notable outflow, with a staggering $494 million worth of Bitcoin, equivalent to approximately 6,850 BTC, exiting the fund.

Initially labeled as a record outflow by BitMEX Research, further analysis revealed that while it marked a historic high in terms of Bitcoin price, GBTC had witnessed larger outflows exceeding $500 million on multiple occasions, notably in January and February.

These outflow figures contribute to a broader trend of declining holdings within Grayscale, amounting to a 36% reduction since the trust transitioned into a spot Exchange-Traded Fund (ETF) in January. Prior to this shift, Grayscale held approximately 620,000 BTC, which has since diminished to 395,744 BTC, valued at around $28.5 billion at current market prices.

Bitcoin ETF: Grayscale Trust Loses $302 Million

Since its transformation into a spot ETF, GBTC has consistently experienced outflows totaling $9.26 billion. The new ETF structure allows investors to redeem shares for Bitcoin directly, a feature absent in its previous format. Additionally, GBTC's higher fees compared to competitors like BlackRock's IBIT and Fidelity's FBTC have contributed to ongoing outflows.

Despite GBTC's substantial withdrawals, overall net flow to ETFs has remained largely positive since February, with only two days of net negative flow. Competitors such as BlackRock and Fidelity have observed increased Bitcoin inflows, contrasting with Grayscale's outflows. Notably, VanEck's spot Bitcoin ETF, HODL, recorded a record inflow of $119 million on March 11 following a temporary fee reduction announcement. Similarly, Fidelity's FBTC fund and Bitwise's BITB reported inflows of $215 million and $50 million, respectively.

In contrast, the Grayscale Solana Trust (GSOL) witnessed its secondary market price surge to $540 on March 8, accompanied by a premium rate of 873%, highlighting a significant disparity between market price and Net Asset Value (NAV). This unprecedented spike has sparked speculation among investors, with some attributing it to potential institutional activities, particularly involving Pantera Capital and its management of staked Solana (SOL) assets. This situation has prompted discussions regarding the underlying reasons for GSOL's market performance and the potential existence of undisclosed institutional information.