Grayscale’s GBTC Yesterday, recorded an outflow of $105 million, the only highlight of an underwhelming day of trading for Bitcoin ETFs.
On Dec 12, a day before yesterday, Bitcoin ETFs were pumping pulling in a staggering $597 million. This was the highest inflow recorded for the second week of December.
Things were really quiet yesterday as the 11-spot Bitcoin ETFs managed to pull in only $35.9 million, no thanks to the Farside massive outflow of $105 million recorded on Grayscale GBTC.
Data from Farside Investors UK revealed that Blackrock’s IBIT, the biggest ETF product by inflows recorded no action for the day.
The highest inflow for the day was recorded by Fidelity’s FBTC pulling in $60 million for the day. Bitwise and Ark 21 shares followed suit recording inflows of $33.2 million and $28.4 million respectively.
On the lower spectrum of things Vaneck’s HODL, WisdomTree’s BTCW, and Grayscale’s BTC pulled in $8.6 million, $7 million, and $4.5 million respectively.
The Total value traded as of yesterday was $3.10 billion with a cumulative Net inflow of $35.21 billion per data from Soso value.
Why does Grayscale’s GBTC keep bleeding funds?
Graycale’s GBTC which drained the Bitcoin ETFs yesterday by losing $105 million already lost $135.6 million in the four days before yesterday.
This means that Grayscale’s GBTC recorded outflows four times out of the five trading days of the week.
This has been a recurring theme for this particular fund since it was converted from a Bitcoin trust to an Exchange Traded Fund in mid-January.
Wall Street Journal reporter, Vicky Ge Huang speaking on the Tech News Briefing Podcast explained why this is happening to one of the oldest Bitcoin funds in the industry.
“ For the longest time, a lot of investors put a lot of money into the trust seeking an easy and frictionless way to invest in Bitcoin. So the assets in the fund grew, and because the trust traded at a premium to the price of Bitcoin for a long time, that also attracted a lot of investors to put money in the fund betting that perhaps this premium could continue.
However, Grayscale converted the Bitcoin trust into an exchange-traded fund, meaning that investors can take their investments out of the fund without having to suffer a discount on the value of their shares. So this resulted in a lot of investors taking money out of the fund because, since early 2021, the Grayscale Bitcoin Trust had been trading at an increasingly steeper discount to the value of the Bitcoin it held, so those investors obviously wanted out immediately.” Vicky stated
The reporter explained further that the investors pulling their money from Grayscale’s GBTC are taking them to the other 10 Bitcoin ETFs by Wall Street asset managers. These ETF funds like Blackrock and Fidelity offer cheaper fees compared to Grayscale and sometimes the service is almost free during promotions.
The 11 spot Bitcoin ETFs now hold more Bitcoin than Bitcoin founder Satoshi Nakamoto.
The Bitcoin ETFs hold a little under 1.1 million BTC assets equivalent to about 5% of all existing Bitcoins.
