Grayscale Investments, a renowned player in the digital asset investment space, has witnessed a significant reduction in its bitcoin holdings over the past three months since the introduction of U.S. spot bitcoin Exchange-Traded Funds (ETFs) on January 11.
Grayscale Bitcoin ETF Holdings Drop by 50%
Grayscale’s Bitcoin Trust (GBTC) imposes a notably higher fee compared to its competitors, standing at 1.5% in contrast to the current 0.12% fee charged by BlackRock’s IBIT, for instance. As a result, GBTC’s bitcoin holdings have dwindled by around 50% to around 311,621, as announced in the fund’s recent reports.
Unlike the newly introduced ETFs from industry giants like BlackRock and Fidelity, Grayscale’s existing Bitcoin Trust was transitioned into an ETF, starting with around 619,220 bitcoin at the onset of spot bitcoin ETF trading on January 11.
Redistribution of Market Share
Despite the decline in bitcoin holdings, Grayscale’s assets under management have experienced a less severe drop, decreasing by 31% from $28.7 billion on January 11 to $19.8 billion at present bitcoin prices.
The emergence of BlackRock’s IBIT and Fidelity’s FBTC spot ETFs has largely contributed to the redistribution of market share in terms of bitcoin holdings. GBTC, which initially dominated the market with nearly 100% share, has now shrunk to just 37.3%. In comparison, IBIT commands a 32.2% share, with FBTC trailing at 17.8%.
Overall Bitcoin Spot ETF Market
The cumulative assets held by all U.S. spot bitcoin ETFs now stand at nearly 840,000 BTC, representing over 4% of bitcoin’s total 21 million supply. Amid market fluctuations, BlackRock’s IBIT has remained resilient, recording consistent flows for two consecutive trading days.
While IBIT witnessed inflows of $73.4 million on Monday, GBTC experienced outflows amounting to $110.1 million, resulting in a net outflow of $36.7 million. Despite these fluctuations, the overall net inflows since the launch of spot bitcoin ETFs have totaled $12.5 billion.
Fidelity’s FBTC, however, experienced its first zero flow day on Friday, marking the end of its 63-day inflow streak. On the other hand, IBIT continues its streak with a current 65-day inflow, placing it among the top performers in this regard.
Stalled Momentum
Commenting on the market sentiment, James Butterfill, CoinShares’ Head of Research, noted that investors appear to be exercising caution amid stalled positive price momentum in the digital asset space. On the other hand, ETF analyst, James Seyffart, also commented on the matter on social media platform X by stating:
“On any given day, the vast majority of ETFs will have a flow number of ZERO — this is very normal. There are ~3,500 ETFs in the US. Yesterday 2,903 of them had a flow of exactly zero.”
In the broader context, bitcoin’s price currently hovers around $62,350, down 3.5% in the last 24 hours and 10% over the past week due to geopolitical tensions. Nevertheless, the digital asset remains up by 50% year-to-date.
As the bitcoin community anticipates the halving event, scheduled to occur in just four days, market observers are closely monitoring the potential impact on miners’ rewards.
