The ten Bitcoin ETFs in the USA have never experienced such high outflows in one trading day as yesterday, March 19th. After Data from Farside Investors There were total net outflows worth over $326.2 million. Responsibility for this lies primarily with the Grayscale Bitcoin Trust, which lost a further $443.5 million after a negative record on Monday. This means that the market share of the former pioneer continues to decline lies now at 44 percent. Meanwhile, BTC is trading at $63,657 at press time, 13.5 percent below its all-time high.
The turnaround underlines one thing above all: When the major Bitcoin ETF issuers buy on behalf of their customers, then these purchased BTC are not literally permanently “taken off the market.” Instead, at the request of the same investors, BlackRock & Co. can just as quickly reduce their Bitcoin holdings, just as happens with stock, gold or bond ETFs. This is a fundamental difference from MicroStrategy, because Michael Saylor’s “Bitcoin development company” owns the coins itself and is pursuing a long-term plan with its purchases. Only recently did the permabull strike again, so that there are now an impressive 214,246 BTC on the balance sheet.
Will Grayscale soon run out of Bitcoin?
If the current trend continues, Grayscale’s BTC reserves should soon be depleted. If the GBTC continued to bleed as many Bitcoin every day as it did yesterday, the converted trust would be left high and dry by mid-May. But even with an extrapolation of average net outflows of $274.2 million, things would look bleak at the start of summer. It is therefore no surprise that Grayscale is now taking action and offering investors the prospect of a fee reduction. The managing director of the digital asset manager commented on this told CNBC, even if he hasn’t given a specific number yet. In general, he was surprisingly optimistic given the difficult situation:
We are at the end of the first phase of the game, so to speak, where the pent-up demand for purchases has hopefully been satisfied and the pent-up demand for sales has hopefully been satisfied as well.
Grayscale CEO Michael Sonnenshein
The comparatively high fees of 1.5 percent are considered the main reason for the enormous capital outflows of the Grayscale ETF. For comparison: None of the nine other Bitcoin ETF providers charge more than 0.3 percent in fees. In total, the fund has seen outflows of nearly $12.9 billion in the 49 trading days since the SEC ETF approval. BlackRock can be considered the main beneficiary with its iShares Bitcoin Trust, which already over Holds 237,000 Bitcoin and therefore has a market share of 28.4 percent. The financial giant’s Bitcoin ETF has so far only recorded net inflows on all trading days. It’s probably only a matter of time before BlackRock dethrones Grayscale’s competing product.
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