Leading up to the Bitcoin halving, Grayscale’s spot Bitcoin ETF experienced a continuous outflow streak over five days, with total exits reaching $89.9 million, contributing to a net outflow of $1.6 billion since its January launch.
Data from SoSoValue revealed that Grayscale’s GBTC saw significant outflows, while other spot Bitcoin ETFs, including those from Fidelity and BlackRock, garnered demand to counterbalance some of GBTC’s liquidations. Fidelity’s FBTC recorded net inflows of $37.3 million, surpassing BlackRock’s IBIT, which saw inflows of $18.7 million on April 18.
Despite being a dominant player at its launch, GBTC has experienced a substantial decline in assets under management (AUM), losing market share to newer entrants like BlackRock. In just four months of trading, GBTC’s AUM has plummeted by approximately 50%, with Grayscale now holding less than $20 billion in AUM compared to BlackRock’s over $17 billion.
Various factors have contributed to the significant outflows from GBTC, including ongoing bankruptcy proceedings involving platforms like FTX and Genesis, as well as Grayscale’s relatively high fund fee of 1.5%. In response to these challenges, Grayscale CEO Michael Sonnenshein has announced plans to gradually reduce GBTC fees over time. Additionally, the company has proposed launching a Bitcoin Mini Trust ETF with lower fees to regain market demand.
The cryptocurrency market’s dynamics are evolving rapidly, with established players facing competition from newer entrants offering competitive products and fees. Grayscale’s efforts to adapt to these changes reflect the ongoing evolution and maturation of the cryptocurrency investment landscape.
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