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Grayscale’s bitcoin value has fallen 33%, reaching a total of $9.26 billion since converting to the ETF.

It may suggest that investors are backing away from traditional Grayscale funds in favor of more modern and flexible products, such as Bitcoin ETFs.

Date: 2024-03-05 Author: Marek Stiller
Grayscale’s bitcoin value has fallen 33%, reaching a total of $9.26 billion since converting to the ETF.

Since Grayscale Bitcoin Trust (GBTC) was converted into an exchange-traded fund (ETF) in mid-January, the world’s largest crypto asset manager, Grayscale, has seen a significant decline in its bitcoin (BTC) holdings.

According to the latest data released by BitMEX Research, GBTC recorded its 36th consecutive day of outflows on March 4.

During that time, 5450 BTC left the fund, which translates to about $368 million. Since the switch to ETFs, the total outflow of money has reached an impressive $9.26 billion.

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Grayscale’s Bitcoin shares fall 33%

According to Coinglass, Grayscale held about 620,000 BTC before the ETF conversion . The launch of the Bitcoin ET F by Grayscale introduced a new feature that allowed investors to exchange their shares for Bitcoin, which was not possible under the previous structure.

In addition, GBTC ‘s higher fees compared to other ETFs, such as BlackRock’s IBIT and Fidelity’s FBTC, may have contributed to the outflows.

According to both the portfolio and the GBTC fund’s website, it currently holds 420,682 BTC, putting its estimated value at around $28.8 billion. Market observers are speculating on when Bitcoin’s “bleeding” on GBTC may end.

Notwithstanding the fact that the GBTC outflow occurred in late January and early February, some analysts thought it might end. In mid-February, however, bankruptcy courts allowed cryptocurrency lender Genesis to liquidate about $1.3 billion worth of GBTC shares to return the arrears to investors.

ETF analyst Eric Balchunas of Bloomberg had previously suggested that the outflows would likely stop once GBTC saw a 25% reduction in issued shares. However, a survey conducted on the X platform showed that most respondents expected the bleeding to end in the 35-50% range.

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Other bitcoin ETFs see steady inflows

In contrast to the GBTC situation, amid Bitcoin’s ongoing rally, the rest of the Bitcoin ETFs exceeded expectations. Data from March 4 showed that the remaining ETFs had a combined total of about $5.5 billion, making it the second-biggest volume day.

The BlackRock IBIT fund recorded a daily volume of about $2.4 billion, and assets under management have now exceeded $11 billion. In addition, each of the new ETFs rose by more than thirty percent in just six days, contributing to the continued flow of funds.

march 4 was also a record day for Fidelity, with preliminary data from Farside Investors showing that inflows totaled $404.6 million, more than offsetting GBTC outflows.

The Bitwise Bitcoin ETF (BITB) also performed well, attracting inflows of $91 million, the highest inflows since February 15.

The strong inflows of Bitcoin ETFs further boosted the price of BTC. According to CoinMarketCap data, the flagship cryptocurrency recently rose 9% on Monday , reaching a daily high of $68,785.

The figure is just a few dollars away from the all-time high of $68,789 recorded in November 2021. Bitcoin has lifted other crypto tokens, especially meme coins. Dogecoin (DOGE) rose 32%, while the Shiba Inu coin (SHIB) rose 95%.

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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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