Thomas Daniels
Investment enthusiasm for the recently launched Bitcoin spot exchange-traded funds (ETFs) is diminishing, as evidenced by a recent net withdrawal of $80 million. Bloomberg has reported that these Bitcoin ETFs initially experienced a substantial $270 million influx on Wednesday. Yet, when considering the withdrawals from Grayscale Investment’s Bitcoin ETF, the net outflows reached approximately $153 million on the same day. This trend of net outflows persisted, with a $80 million withdrawal noted today, marking a fourth consecutive day of net reductions across these funds.
Particularly, these outflows were exclusively from the Grayscale Bitcoin Trust (GBTC), which evolved into an ETF following approval from the U.S. Securities and Exchange Commission. Since its conversion on January 11, GBTC, which has been operational for over ten years, has witnessed an outflow of around $4.8 billion. During this time, Bitcoin’s value dropped roughly 20%. GBTC’s transition from a closed-end trust to an ETF format allowed investors an opportunity to divest from what was once a lucrative arbitrage option.
This transition triggered substantial market sales, in part due to the liquidation procedures of the bankrupt FTX exchange. The most significant daily withdrawal from this fund was $641 million on January 22, though this figure decreased to $394 million by January 25.
