The withdrawals from Grayscale’s Bitcoin Trust (GBTC) increased over the first few days of the ETF’s trading as a spot Bitcoin exchange-traded fund (ETF), which caused the total amount of assets under management to drop by around $5 billion.
The ETF’s total assets decreased from $28.5 billion on January 10 to $23.7 billion on January 18, per data from YChart and Grayscale.
The reduction in AUM can also be explained by the price of bitcoin. Since Bitcoin is the ETF’s underlying asset, changes in its market value directly affect the fund’s overall worth.
Refunds from GBTC were projected. Following the Securities and Exchange Commission’s (SEC) approval of the ETF on January 10, holders of GBTC were able to convert and redeem their shares for Bitcoin. Before then, investors could only liquidate their positions by selling their shares on the secondary market.
In just three days, investors withdrew about $1.1 billion from Grayscale’s exchange-traded fund (ETF) as they sought lower fees from rival firms and seized upon a slight discount on the shares.
The CEO of CoinRoutes, Dave Weisberger, stated on X that the makeup of GBTC holders might be a major factor in the current outflow surge. Recently observed market swings may be attributed to panic selling in addition to hedgers looking for discounts and other investors seizing on decreased fees.
Also Read: Grayscale’s Bitcoin Moves to Coinbase Shake the Crypto Market
