Grayscale Investments, a major investor in Bitcoin (BTC), has seen a significant decrease in its holdings of Bitcoin in its spot Bitcoin exchange-traded fund (ETF) ahead of the anticipated Bitcoin halving event. The Grayscale Bitcoin Trust ETF (GBTC) now holds half the amount of Bitcoin it had on the first day of trading, with the current holdings being worth $19.7 billion. This decrease in holdings comes just two days before the Bitcoin halving, which will reduce the mining reward by 50%. While these two events do not directly correlate, they add to the series of coincidences in the timeline of Bitcoin-related occurrences.
The GBTC has been experiencing a massive sell-off since its first day of trading, which has had a significant impact on the price of Bitcoin. This sell-off has been attributed to the high trading fees of GBTC, which were the highest among the 10 spot Bitcoin ETFs in the United States at the start of trading. In contrast, other Bitcoin ETFs have been lowering their fees to increase competitiveness. BlackRock’s iShares Bitcoin Trust (IBIT), which is GBTC’s biggest rival, offered a lower fee at the start of trading and has seen a surge in holdings. However, despite this growth, IBIT has not been able to absorb the outflows from GBTC. In total, the 10 spot Bitcoin ETFs collectively hold around $54.7 billion worth of Bitcoin as of April 16, 2024.