Grayscale’s GBTC Outflows Slow, Analysts Caution on Further Decline

• The majority of the outflow left GBTC in January, with $5.64B departing by month’s end.
• Grayscale still charges 150 bps, while the fees for the recently released ETFs is quite less.

Even if many think there’s space for further outflow, crypto asset manager Grayscale has seen a decrease in outflows from its spot Bitcoin ETF.

Research from Bianco Research and Farside shows that as of February 16th, the total amount of money that has been pulled out of the Grayscale Bitcoin Trust (GBTC) since it became a spot Bitcoin ETF hit $7 billion. While withdrawals have slowed significantly, some analysts, like Nate Geraci, president of the ETF Store, are predicting that the worst may still be ahead.

Still Early Days

The majority of the outflow left GBTC in January, with $5.64 billion departing by month’s end; however, just $1.37 billion has left so far in February. Fund managers are resetting their holdings and moving to spot Bitcoin ETFs with cheaper fees, according to several analysts.

Grayscale still charges 150 bps, while the fees for the recently released ETFs range from zero to twelve basis points. The reason why GBTC is still losing money: when BlackRock applied for its spot ETF in June 2023, the fund was trading at a significant discount to the market price of Bitcoin, at 44%.

On the other hand, analysts think it’s still early days and predict that the outflow will likely continue. Genesis, a defunct crypto lender, was recently granted permission by a court to sell off some of its holdings in Grayscale, which might lead to more outflows.

Genesis reportedly owns around $1.6B worth of GBTC, Grayscale Ethereum Classic Trust, and Grayscale Ethereum Trust shares, as revealed in court records.

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