Vedant Sahu
Grayscale’s Bitcoin Trust (GBTC) has been in the spotlight recently as it has moved over 19,000 bitcoin (BTC) from its publicly known wallet on a Wednesday morning. This movement of digital assets comes in the wake of the launch of spot bitcoin exchange-traded funds (ETFs) on January 11. Since that date, Grayscale has shifted nearly 113,000 bitcoin from its wallet, with the majority being sent to Coinbase Prime, presumably for the purpose of selling.
As of Wednesday morning, the Grayscale website displayed that GBTC held approximately 537,000 bitcoin, marking a significant decrease of about 100,000 BTC since January 11. However, it’s worth noting that not all of this movement can be attributed to redemption. According to Arkham, a data analytics platform, these outflows are typically divided between Coinbase Prime and new GBTC custody addresses, suggesting that some of the bitcoin moved is related to trading activity settlements rather than redemption.
Several factors have contributed to the substantial outflow from GBTC. One key reason is Grayscale’s decision to reduce its management fee from 200 basis points to 150 basis points (1.50%) following the transition to a spot ETF structure. This fee remains significantly higher than the fees charged by the other nine competing bitcoin ETFs, which may have prompted some investors to look elsewhere. Consequently, Grayscale’s assets under management (AUM) have experienced a significant decline, losing over $1 billion each day throughout the week.
The rapid pace of bitcoin sales by GBTC has put downward pressure on the price of Bitcoin itself. Earlier in the week, Bitcoin saw a decline below the $40,000 mark, reaching its lowest level in nearly two months. As of the time of this report, the price of Bitcoin was hovering around $39,800, exhibiting relatively flat movement over the past 24 hours.
Bitcoin bulls briefly found hope earlier in the week when a CoinDesk report suggested that the FTX exchange had offloaded its substantial 22 million share holding in GBTC. The expectation was that with this major non-economic seller out of the picture, there might be a slowdown in GBTC exits. However, this has yet to materialize, as evidenced by the recent transfer of 19,000 bitcoin to exchanges, underscoring the ongoing pressure on GBTC and its impact on the cryptocurrency market.