Grayscale Bitcoin ETF latest insights and trends
Recently, Grayscale Bitcoin Trust (GBTC) has reported facing tough competition because there are other more accessible options to trade Bitcoin, like ETFs (exchange-traded funds). People are taking their money out of Grayscale Bitcoin ETF and with some new money coming in.
Grayscale Bitcoin ETF is a channel where people invest money indirectly and own Bitcoin without dealing with buying and keeping Bitcoin. When you invest in Grayscale Bitcoin Trust, you will get a share that represents a part of the Bitcoin owned by the trust. These shares’ value ranges based on the current value of Bitcoin minus any expenses the trust has, like fees.
As known, Bitcoin is a digital form of money. It is made and circulated using a system called the Bitcoin Network, which is a group of connected computers. This network allows people to trade Bitcoins securely, and it is called a Blockchain.
On May 3rd, Grayscale Bitcoin ETF inflow was about $63 million. Even though GBTC is a big player in this game, it is still losing its popularity because it charges higher fees, 1.5%, as compared to these new ETFs that charge less than 1%. As a result, lots of investors have been withdrawing their money from GBTC.
Grayscale CEO Michael Sonnenshein told CNBC the firm will cut fees on its fund “over time.” The current 1.5% fee is significantly higher than those levied by the nine other ETF providers. Their fees top out at around 0.25% although temporary waivers often bring them down to zero.
At one point, GBTC had over 600,000 Bitcoins cryptocurrencies, but now it is estimated to have around 290,000.
On 3rd May, the Grayscale Bitcoin ETF market as a whole experienced a net inflow totaling $378 million. It is noted that noteworthy performances included Franklin Templeton’s Bitcoin ETF (EZBC), which recorded its highest-ever inflow of $60.9 million, and Fidelity’s Bitcoin ETF (FBTC), which led the day with $102.6 million in inflows.
“As the largest and currently the most expensive bitcoin ETF, profit taking and redemptions are understandable,” said Todd Rosenbluth, head of research at VettaFi, a market analysis firm.
BlackRock’s iShares Bitcoin Trust (IBIT) is a new channel launched as a competitor to the most significant Bitcoin ETF. Even though IBIT started in January 2024 and is catching up in the eyes of new investors. Right now, GBTC still has more assets, with $18.1 billion compared to IBIT’s $16.9 billion.
Although the inflow figure is a positive sign for Grayscale Bitcoin ETF, IBIT’s rapid growth is still creating competitive pressure for GBTC.
