Grayscale Struggles Amid $21 Billion Outflows; Investor Confidence Wanes

Grayscale Bitcoin Trust (GBTC) has experienced $21 billion in outflows since its January 2024 launch, becoming the only U.S. spot Bitcoin exchange-traded fund (ETF) with a negative investment movement.

Data from Farside reveals that the GBTC experienced daily outflows averaging $89.9 million over the past 11 months. As of December 16, the GBTC has seen a total of $21.045 billion in outflows, with the trust continuing to lose millions of dollars in investments each day.

While the 10 spot Bitcoin ETFs in the U.S. have maintained positive balance sheets, GBTC’s outflows have overshadowed the investments brought in by the Fidelity Wise Origin Bitcoin Fund, Bitwise Bitcoin ETF, ARK 21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, Franklin Bitcoin ETF, Valkyrie Bitcoin Fund, VanEck Bitcoin ETF, WisdomTree Bitcoin Fund, and Grayscale Bitcoin Mini Trust ETF. These have collectively brought in $20.737 billion.

In contrast, BlackRock’s iShares Bitcoin Trust (IBIT) has been a major contributor to the positive performance of the spot Bitcoin ETF market. With total inflows of $35.883 billion and an average daily investment of $153.3 million since its launch, IBIT played a key role in driving the overall market to surpass $35.5 billion in investments within just a year.

On January 11, the U.S. Securities and Exchange Commission (SEC) approved the launch of spot Bitcoin ETFs, signaling a significant regulatory shift after years of rejecting similar applications. This decision followed a pivotal court ruling in 2023, where Grayscale won a lawsuit against the SEC, overturning the agency’s denial of its request to convert the GBTC into an ETF.

The trust’s legal victory initially raised expectations that it would solidify its position in the market. However, investor confidence has since shifted to other products, driven by several factors. Key among them is the fact that newer Bitcoin ETFs offer clearer regulatory frameworks and better liquidity, making them more attractive than GBTC.

The challenges for Grayscale are not limited to Bitcoin. Its Ethereum Trust ETF (ETHE) is now facing similar difficulties. According to Farside data, the ETHE fund has experienced losses surpassing $3.5 billion since its launch in July 2024.

In contrast, other spot Ether ETFs have seen strong inflows, with BlackRock’s iShares Ethereum Trust ETF (ETHA) and Fidelity Ethereum Fund (FETH) leading the market, attracting $3.2 billion and $1.4 billion in investments, respectively.

Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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