Grayscale’s Bitcoin Holdings in GBTC Plummet Over 60% Amid ETF Competition

Coinspeaker
Grayscale’s Bitcoin Holdings in GBTC Plummet Over 60% Amid ETF Competition

The struggle is real for Grayscale, which at the moment is not only hustling to retain investors but also continues to lose its Bitcoin holdings. According to CoinGlass data, the world’s second-largest crypto asset manager has seen a massive reduction in its Bitcoin holdings within its Grayscale Bitcoin Trust (GBTC). That is, since converting the fund into an exchange-traded fund (ETF).

Since its ETF debut early this year, GBTC’s Bitcoin reserves have dropped by over 60%, signaling how far from grace the once-dominant fund may have fallen.

In January, Grayscale converted its Bitcoin Trust into an ETF as part of its efforts to capture a broader market. At that time, GBTC held nearly 620,000 Bitcoin (BTC). As of April 28, however, that number had plummeted to approximately 227,400 BTC.

For what it’s worth, there may be a connection between the current situation with GBTC’s Bitcoin holdings and ongoing outflows from the fund. However, even the outflows appear to be driven by some key factors, including high management fees and rising competition from other funds. That is especially true for BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s FBTC.

These factors may have been largely responsible for investors withdrawing their assets from the fund.

Just five months after its launch, BlackRock’s IBIT displaced GBTC to snap up the position of the largest Bitcoin ETF. IBIT’s rise to fame has been spectacularly fast and noticeable in all ramifications.

Farside Investors data suggests that the fund has seen net inflows almost daily since making its debut. For context, investors have poured in over $220 million into IBIT just this week.

As of publication, the fund holds approximately 358,000 BTC, valued at around $22 billion. At this time, there is no questioning IBIT’s dominance of the Bitcoin ETF market.

Presently, GBTC is struggling to find its standing and return to its previous level of relevance among investors. However, the outflows continue to erode its position.

Nonetheless, there are signs that GBTC’s losses may be slowing. According to Farside Investors, the outflows are still there, but they have significantly reduced. This was shown in its Wednesday’s net outflow of just $8 million, its lowest since mid-July.

For now, it appears that the worst of the outflows might be over for GBTC. However, it also remains to be seen whether the fund will be able to regain its former stature amid the fierce battle that other funds are putting up.next

Grayscale’s Bitcoin Holdings in GBTC Plummet Over 60% Amid ETF Competition