Bitcoin ETF: Grayscale Faces Freefall with $21 Billion in Outflows

In less than 12 months, the GBTC has recorded colossal outflows of 21 billion dollars. A phenomenon that raises questions among investors! But not just that! It is also disrupting the Bitcoin ETF market in the United States.

Grayscale Bitcoin Trust ETF outflows exceed $21B in under 12 monthshttps://t.co/Lkm3vbbOuL

— Amos Tallent 2 (@AmosT333) December 16, 2024

The Grayscale Bitcoin Trust records record outflows

Since January, the GBTC from Grayscale has been going through a tumultuous period. With an average daily loss of 89.9 million dollars, the fund remains the only Bitcoin spot ETF in the U.S. with negative investment outflows. As of December 16, the total outflows reach 21.045 billion dollars. An alarming figure for a fund that was once dominant in the Bitcoin ETF market!

The causes of this downturn seem to be multiple:

• increased competition,
• high fees,
• loss of investor confidence.

The new Bitcoin ETFs launched recently offer more competitive alternatives, thus attracting capital.

Competing ETFs gain ground against Grayscale

While the GBTC bleeds, other funds are pulling ahead. Among them, the iShares Bitcoin Trust (IBIT) from BlackRock stands out with total inflows of 35.883 billion dollars. With an average of 153.3 million dollars per day since its launch, the BlackRock IBIT has become an essential leader in the BTC ETF ecosystem.

The other nine Bitcoin ETFs (including Fidelity, Bitwise, and ARK 21Shares) have collectively raised 20.737 billion dollars since their introduction. This performance sharply contrasts with the massive losses recorded by the GBTC.

Ethereum Trust: a similar case to watch

The challenges of Grayscale are not limited to BTC. The Grayscale Ethereum Trust (ETHE), launched in July, is experiencing a similar trend with 3.5 billion dollars in cumulative outflows over six months.

In parallel, funds like BlackRock’s iShares Ethereum Trust are showing positive inflows. This proves that the momentum observed in Bitcoin ETFs is extending to the Ethereum market.

This upheaval reflects the evolution of investor expectations in search of more efficient solutions. Competition is intensifying, thereby redefining the landscape of Bitcoin investments for the months to come.