News - Grayscale continues to lose Bitcoin

By Mike Hesp

Grayscale continues to lose Bitcoin

Bitcoin (BTC)

More than 200,000 BTC has already flowed out of the Grayscale Bitcoin Trust. BlackRock and the rest, however, are fiercely resisting - and have new plans.

Since the launch of the Spot ETF's on Jan. 11, there are 217,844 Bitcoin worth US$10 billion flowed out of the Grayscale Bitcoin Trust (GBTC). This is evident from data from BitMEX Research. However, the nine other ETFs have more than offset the massive selling of GBTC: The two largest ETFs alone - BlackRock's IBIT and Fidelity's FBTC - have taken more than 300,000 BTC off the market since trading began.

In total, BlackRock's Bitcoin ETF already has approximately 187,532 BTC owned, which are currently worth $12.7 billion. This represents a market share of an impressive 23 percent. In second place is the Fidelity product with 115,978 BTC, equivalent to $7.8 billion at the time of writing.

Together, the Bitcoin ETFs have an impressive 791,000 BTC, which is already more than 3.95 percent of the Bitcoin currently in circulation. And the trend is rising. The new capital flowing into the market through ETFs could fuel a rising trend in the coming quarters.

Here's why the GBTC sell-off persists

One reason for GBTC's continued outflow can be found in its fee structure. Grayscale charges 1.5 percent per year, BlackRock just 0.25 percent. Cathie Woods' ETF product undercuts even that: managing BTC in the ARK 21Shares Bitcoin ETF (ARKB) costs just 0.21 percent. With the Bitwise Bitcoin ETP Trust, it's even as low as 0.20 percent. VanEck has recently also reduced his fees again.

Another factor in the increased outflow of BTC at Grayscale is the sale of 35 million GBTC shares by Genesis. The insolvent crypto borrower received approval from the insolvency judge on Feb. 14, as reported by Bloomberg reports.

BlackRock applies for new fund with Bitcoin

BlackRock's iShares Bitcoin Trust (IBIT) is breaking one record after another. IBIT is the fastest ETF to reach $10 billion in assets under management, rivals the S&P 500 in volume and has been one of the top ETFs since its launch on Jan. 11, 2024.

Not surprisingly, BlackRock wants to build on on this success. According to a filing to the SEC, the world's largest asset manager wants to integrate "physical-backed Bitcoin exchange-traded products (ETPs)" - or Bitcoin Spot ETFs - into its Global Allocation fund. This fund currently manages assets worth $17.8 billion.

If the U.S. Securities and Exchange Commission approves the application, institutional investors will have another product with which to integrate BTC into a diversified portfolio.

If Wall Street's interest continues, the scenario of a demand shock is quite realistic - also in view of the upcoming halving. This development is already showing itself: at the time of writing, Bitcoin stands at $67,418, with a weekly gain of 8.6 percent.

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