Grayscale Sees Huge Bitcoin ETF Outflow, But Record Inflow for VanEck

Funds have been flowing out of the Grayscale Bitcoin Trust (GBTC) for more than two months. Moreover, March 11 was the largest outflow for the month.

A whopping $494 million worth of BTC exited the fund yesterday. This works out at 6,850 BTC, according to BitMEX Research, which labeled it a record outflow.

The BitMEX declaration is misleading, however, as GBTC outflows exceeded $500 million for five days in January and again on Feb. 29.

SIX THOUSAND EIGHT HUNDRED AND FIFTY ALL TIME RECORD HIGH BITCOIN WITHDRAWN FROM GBTC TODAY https://t.co/x6j7bQWqbv

— BitMEX Research (@BitMEXResearch) March 11, 2024

BitMEX clarified stating that it meant a record-high in terms of Bitcoin price, before adding it was the sixth-largest outflow in US dollar terms for GBTC.

Why Is BTC Leaving Grayscale?

Grayscale’s Bitcoin holdings have declined by 36% since GBTC was converted into a spot ETF in January. Before the conversion, it held around 620,000 BTC, but that figure has now fallen to 395,744, according to its website. Nevertheless, the remaining assets are still worth $28.5 billion at current BTC prices.

When Grayscale converted the product to a spot ETF, it allowed investors to redeem their shares for the underlying asset for the first time. Moreover, it also has higher fees than competing products from BlackRock and Fidelity, so investors have been cashing out or rebalancing their portfolios.

Regardless of these huge outflows, there have only been two days since the beginning of February when the net flow to all ETFs has been negative.

BlackRock and Fidelity have been hoovering up more BTC than Grayscale, which has been hemorrhaging.

According to preliminary data from Farside Investors, March 11 saw a record inflow for VanEck’s spot Bitcoin ETF, HODL. The fund had $119 million in inflows for the day. This came after an announcement by the company that it would be slashing the fees temporarily.

Fidelity’s FBTC fund saw inflows of $215 million, while Bitwise’s BITB had a $50 million inflow.

Crypto Markets Close on ATH

Crypto market capitalization has reached $2.85 trillion, which is just 8% away from its all-time high. The massive 5.2% gain was driven by Bitcoin yet again as the asset powered to a new peak price of $72,700 in late trading on March 11.

Some of the altcoins are also making big gains, with Ethereum reaching $4,000 and Solana topping $150.

Ripple’s XRP has powered over $0.70 in a 15% gain while Avalanche has surged 19% to reach $50.