Slowing Down of Capital Outflows
The crypto asset management giant Grayscale has been monitoring a slowdown in the outflows from its flagship Bitcoin spot exchange-traded fund (ETF). Nate Geraci, ETF Institute’s co-founder, highlighted in a recent update that Grayscale’s GBTC has seen the outflow of funds reach a staggering $7 billion since its conversion to a spot Bitcoin ETF. However, it’s not all bleak as the rate of these outflows has decelerated, hinting that the worst may have passed.
January’s Record Outflows Versus February’s Respite
While January witnessed the bulk of the outflows, with a massive $5.64 billion exiting GBTC, February presented a stark contrast with a notably lower figure of $1.37 billion in outflows. This suggests a potential stabilization in investor sentiment following the initial shockwave of withdrawals.
Genesis Investment Impact
Further outflows may be on the horizon, following a court’s approval for the bankrupt crypto lender Genesis to liquidate some of its holdings in Grayscale. Genesis’s investment in GBTC, along with stakes in Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Classic Trust (ETCG), was valued around $1.6 billion, as per the latest court filings.
Rise of Spot Bitcoin ETFs
Despite the outflows from Grayscale, the broader landscape for Bitcoin ETFs is thriving. In the first month after their inception on January 11, the combined assets of nine leading spot Bitcoin ETFs soared past 200,000 BTC, equivalent to approximately $9.5 billion. These new entrants, including names like BlackRock’s IBIT and Fidelity’s FBTC, have quickly climbed the ranks, outpacing even silver ETFs in popularity among commodity exchange-traded funds in the U.S.
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