Grayscale’s Bitcoin exchange-traded funds (ETF), GBTC, is seeing significant outflows, with over $166 million and 2,500 Bitcoin withdrawn from the fund’s holdings on April 12. Since the launch of the Bitcoin ETF in January, outflows from GBTC have surpassed $16.2 billion, according to Farside Investors data. Outflows from GBTC in April have ranged from $75 million to $300 million each day. In contrast, inflows into Bitcoin ETFs have been minimal, indicating decreasing investor interest. GBTC saw outflows of $767 million this week, contributing to negative flows into Bitcoin ETFs overall. BlackRock’s IBIT Bitcoin ETF has been gaining support, with assets under management now exceeding $15 billion and narrowing the gap with Grayscale’s Bitcoin reserves. Grayscale CEO Michael Sonnenshein suggested earlier this week that outflows from GBTC might be stabilizing, hinting at optimism among traders and investors. Recent data suggests that the situation may not align with this optimism. One major reason behind the massive outflows from GBTC has been the high management fee charged by the fund. Despite losing flows to competitors, Sonnenshein has been hesitant to cut the fees. GBTC has the highest management fees among all U.S. Bitcoin ETFs, at 1.5% per year compared to the average of 0.30% for its competitors. Sonnenshein pointed out that excitement is typically high when new commodity or thematic exposure products like Grayscale Bitcoin Trust emerge, but these products mature over time, leading to market consolidation as investors focus on a few offerings. On April 10, GBTC saw outflows of $17.5 million, a significant decrease from the $154.9 million outflows recorded on April 9. The lowest outflow was on Feb. 26, when $22.4 million was withdrawn from GBTC. On average, GBTC has experienced daily outflows of $257.8 million over the past four months. GBTC initially launched in 2015 and converted to an ETF in January, along with the launch of nine other Bitcoin ETFs after Grayscale won a lawsuit against the Securities and Exchange Commission. Genesis, a bankrupt crypto lending firm, recently sold approximately 36 million GBTC shares to acquire 32,041 Bitcoin.
The high management fee of 1.5% is definitely a turn-off for investors. Grayscale really needs to reconsider their fees.
Michael Sonnenshein may be optimistic, but the data doesn’t lie. GBTC’s outflows speak for themselves.
The constant outflows from GBTC show that investors are losing confidence in this fund. 😔