Grayscale’s GBTC Sheds Over 13,700 BTC in 24 Hours Amid Rising Bitcoin ETF Competition

Grayscale’s GBTC Sheds Over 13,700 BTC in 24 Hours Amid Rising Bitcoin ETF Competition

Prior to Wednesday’s market opening, Grayscale’s exchange-traded fund, GBTC, reported holding 605,890.87 bitcoin in reserves. However, according to the company’s most recent update, there has been a significant decrease in GBTC’s holdings, with a reduction of 13,793.09 bitcoin, valued at approximately $571 million.

Major Outflows Hit Grayscale’s GBTC

This recent decline in reserves marks another 13,793.09 BTC withdrawal from Grayscale’s assets since Bitcoin.com News covered its reductions on Wednesday. Analyzing data from Jan. 14, 2024, records show that Grayscale’s Bitcoin Trust had a total of 617,079 BTC. Consequently, within a span of just four days, a staggering 24,981.22 BTC has been withdrawn from the fund. This substantial outflow, occurring from Jan. 14 to Jan. 17, represents a removal of over $1 billion in value from the fund’s bitcoin holdings.

Currently, as of 2:38 p.m. Eastern Time (ET) on Thursday, the GBTC holdings stand at roughly 592,097.78 BTC. Calculated at the prevailing exchange rate prices at same moment in time, the value of the fund’s BTC cache is estimated to be around $24.5 billion. GBTC once held an edge on the market when it was traded over-the-counter (OTC) and before it recorded a discount to net asset value (NAV), in 2019 it witnessed a significant premium.

When it became a discount in February 2021, the discount to NAV widened a great deal and lasted up until the fund was converted into a publicly accessible spot bitcoin ETF. The market may be feeling the brunt of these sales, but at the same time, several newly approved spot bitcoin ETFs are stacking BTC reserves. Blackrock’s IBIT now holds 25,067 BTC and the Fidelity Wise Origin Bitcoin Fund (FBTC) holds 20,507 BTC.

Bitwise’s BITB, with 8,309 BTC, secures its position as the third-largest (excluding GBTC) among bitcoin ETFs in terms of BTC reserves. Ran Neuner, the founder of Crypto Banter, recently shared insights about the GBTC outflows on the social media platform X. “The GBTC overhang will be around for a while. I don’t see any way that the other ETF’s absorb it,” Neuner remarked. “If Blackrock had huge immediate buyers, they would be in already. I suspect and have been warning that we are due for a correction and we may be midway through it. My first downside target is $39,600 to close the CME gap,” he added.

JPMorgan market strategists led by Nikolaos Panigirtzoglou detailed in a note sent to investors on Thursday that an additional $1.5 billion might still depart from the bitcoin ETF market through GBTC profit-taking. This scenario could exert “further pressure on bitcoin prices over the coming weeks,” Panigirtzoglou wrote. Analysts had earlier projected a decrease of $3 billion in GBTC’s value, and to date, approximately half of this anticipated reduction has materialized. By 4:11 p.m. (ET) on Thursday, BTC was trading for $40,838 per unit, after hitting a 24-hour low of $40,600 at 3:00 p.m. during the afternoon trading sessions.

What do you think about the GBTC outflows since the exchange-traded fund started trading publicly last week? Share your thoughts and opinions about this subject in the comments section below.