Along with a post-peak Bitcoin price drop, the red-hot market for spot Bitcoin ETFs is apparently cooling as well.
Bitcoin now is trading well below its 2021 all-time high of $69,044 despite flipping the market cap of silver and skyrocketing to new levels above $73,000 per coin last week.
One reason? The massive amounts of capital still flowing out of Grayscale’s Bitcoin Trust (GBTC). The new exchange-traded fund (ETF) evolved from an essentially closed-end fund that had been available for years.
As an ETF, it is easier for investors to redeem their shares and take home their gains, and they have been doing just that.
In fact, GBTC had the largest outflows of any ETF since March 2009 at over $12 billion, according to stats shared on Twitter by Todd Sohn, ETF and technical strategist at Strategas Securities.
Bitcoin Falls Below $69,000 as Grayscale Moves Over $400 Million in BTC to Coinbase
Bitcoin today took a hit—falling well below its fresh all-time high to under $69,000 per coin. The biggest digital coin by market cap has since recovered and is back above $70,000 at time of writing. But it's significantly below the $73,700 level it hit yesterday, CoinGecko shows. Bitcoin has been on a roll thanks to the massive success of new spot Bitcoin exchange-traded funds (ETFs). But then data dropped on Thursday from the Labor Department's Bureau of Labor Statistics showing that the produ...
Why such movement in only two months as an ETF? Sohn shared his take with Decrypt, explaining that “there’s arguably a few variables here—fee being one with some leftover holders desiring to leave this vehicle for a cheaper ETF.”
GBTC charges more in fees than the other funds, so investors have been moving away. The fees topic is a hot one, and Grayscale has filed to offer another Bitcoin ETF with lower fees.
Fund manager VanEck even this month temporarily eliminated fees for its Bitcoin ETF in a bid to win more clients.
But despite the huge Grayscale outflows, investor interest in Bitcoin ETFs is “absolutely not” dying down, Sohn added—as the other nine ETFs trading are still receiving big inflows.
“The locomotive is still chugging along, there is still big demand,” he said, adding that Bitcoin’s current downward momentum isn’t something to worry about.
Edited by Ryan Ozawa.
