Grayscale’s Bitcoin Trust (GBTC) faced outflows of $21B, attributed to high management fees and competitive pressure from lower-cost rivals.
Spot Bitcoin ETF launch in the US has been one of the most successful ETF launches in Wall Street’s history, with net inflows soaring to $35.5 billion in less than a year of launch. However, asset manager Grayscale has been at the losing end witnessing a staggering $21 billion in less than a year. Just as Grayscale converted its Bitcoin Trust (GBTC) to a Bitcoin ETF in January, it has witnessed strong outflows in the subsequent months. As per the Farside Investors data, GBTC has lost a total of $89.9 million on daily average outflows.
Although the 10 remaining spot Bitcoin ETFs approved in the US have maintained positive balance sheets, GBTC’s outflows have overshadowed the investments brought in by the other nine funds. For example, the other nine Bitcoin ETFs, excluding BlackRock’s IBIT and Grayscale’s GBTC, have collectively seen a total of $20.73 billion in net inflows.
One of the major reasons behind Grayscale’s value erosion has been its very high management fees. On the other hand, top asset managers like BlackRock and Fidelity have put low management fees attracting more investors. Although Grayscale launched its mini-Bitcoin Trust (BTC) with a low management fee, it failed to garner much attention.
On the other hand, BlackRock’s iShares Bitcoin Trust (IBIT) has single-handedly outperformed all of its peers with a net $35.8 billion in inflows since inception. As a result, its total assets under management (AUM) have also crossed $50 billion in assets under management as the Bitcoin price shows strength above $100K. On average since inception, IBIT has witnessed daily inflows of $153 million. Furthermore, the IBIT share price has also surged by 117% since its launch.
Following the victory of Donald Trump last month, the demand for spot Bitcoin ETF has surged significantly with massive inflows in the last seven weeks. Bitcoin BTC $104 085 24h volatility: 1.4% Market cap: $2.06 T Vol. 24h: $88.67 B has climbed over 50% since the election, with $12 billion flowing into spot Bitcoin ETFs during this period.
Crypto market analysts are predicting Bitcoin ETFs to hit new milestones moving ahead. ETF Store President Nate Geraci stated it’s “possible” that spot Bitcoin ETF assets could surpass physical gold ETF assets by year-end. He notes this will hinge on Bitcoin and gold price trends in the coming weeks. Remarkably, physical gold ETFs have been around for 20 years — a milestone Bitcoin ETFs may soon challenge.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
