Grayscale’s Bitcoin exchange-traded funds (ETF), GBTC, continues to experience significant outflows, with more than $166 million and over 2,500 Bitcoin being withdrawn from the fund’s holdings on April 12. According to data from Farside Investors, outflows from GBTC have now surpassed $16.2 billion since the ETF’s launch in January. Daily outflows from the Grayscale Bitcoin Trust (GBTC) have been fluctuating between $75 million and $300 million in April. Conversely, inflows into Bitcoin ETFs have been minimal, indicating a decline in investor engagement. GBTC saw outflows of $767 million this week, contributing to overall negative flows into Bitcoin ETFs.
BlackRock has shown strong support as assets under management for the IBIT Bitcoin ETF have exceeded $15 billion, narrowing the gap with Grayscale’s Bitcoin reserves. It is likely that a significant portion of GBTC outflows has flowed into BlackRock. Grayscale CEO Michael Sonnenshein suggested earlier this week that outflows from the Grayscale Bitcoin Trust may be stabilizing, indicating optimism among traders and investors. However, current data suggests that the situation may not align with this optimism.
One of the primary reasons for the massive outflows from GBTC is the high management fee charged by the fund. Despite losing flows to competitors, Sonnenshein has been hesitant to reduce the fees. GBTC has the highest management fees among all U.S. Bitcoin ETFs, at 1.5% per year compared to the 0.30% average of its competitors.
Sonnenshein noted that markets often experience high excitement when commodity or thematic exposure products like the Grayscale Bitcoin Trust first emerge. However, as time passes, these products mature, leading to market consolidation as investors focus on a few offerings.
On April 10, GBTC saw outflows of $17.5 million, a significant decrease from the $154.9 million outflows recorded on April 9. The previous low was on February 26 when GBTC outflows amounted to $22.4 million. The average daily outflows for GBTC over the past four months is $257.8 million.
GBTC launched in 2015 and converted to an ETF in January, along with the launch of nine other Bitcoin ETFs, after Grayscale won a lawsuit against the Securities and Exchange Commission, which forced the Commission to review a GBTC conversion bid it had previously denied.
In other news, bankrupt crypto lending firm Genesis recently acquired 32,041 Bitcoin by offloading approximately 36 million GBTC shares. Trezor CEO has warned that Bitcoin ETFs make Coinbase a target for hackers and governments.