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Bitcoin ETF Grayscale is seeing its lowest outflows since the conversion.

A surprising picture in the market! 📉 Grayscale Bitcoin Trust, the largest bitcoin ETF, is seeing its lowest outflows since the conversion. 📊💸 What are the implications of this situation for cryptocurrency investors? 🤔💼

Date: 2024-02-26 Author: Marek Stiller
Bitcoin ETF Grayscale is seeing its lowest outflows since the conversion.

TheGrayscale Bitcoin Trust (GBTC) noted that outflows have reached their lowest points in the past few days, signaling a slowdown in withdrawal volumes.

According to data from BitMEX Research, GBTC recorded outflows of $44.2 million on Feb. 23, the lowest daily volume since its conversion on Jan. 11 from an OTC product to an exchange-traded fund(ETF).

By the end of January, GBTC reported outflows totaling $5.64 billion, much of which, as much as $640 million, occurred on January 22. February brought a drop in outflows, amounting to $1.8 billion so far. Since its inception, GBTC has reported total withdrawals of $7.4 billion.

In contrast, BlackRock ‘s IBIT has accumulated more than $6.6 billion in investments since its launch, followed by Fidelity’s FBTC with more than $4.7 billion in capital. Third place goes to ARK 21Shares, with inflows of $1.4 billion over the same period.

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The massive withdrawal from GBTC was expected. The approval by the U.S. Securities and Exchange Commission on January 10 of an on-site bitcoin ETF opened the door for GBTC holders to convert and realize their holdings. Previously, investors had to sell shares on the secondary market to exit their positions.

According to analysts, investors have also adjusted their portfolios and moved into Bitcoin ETFs with lower fees in recent weeks. GBTC charges an annual management fee of 1.5%, while other issuers charge just 0.19%.

Grayscale’s Bitcoin fund may have another challenge ahead. Bankrupt cryptocurrency company Genesis Global Holdco was recently granted court approval to sell $1.3 billion worth of GBTC shares to return to investors.

The massive outflows, however, may be offset by Grayscale‘s fee structure. “They can have assets slashed by something like 90% and still earn more than all other issuers combined,” noted ETF Store President Nate Geraci on X (formerly Twitter).

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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