According to reports from Bloomberg Intelligence, Grayscale’s Bitcoin ETF has experienced significant withdrawals, amounting to approximately $579 million.
The magnitude of this withdrawal is notable in the context of the broader market for Bitcoin ETFs. Contrastingly, other spot Bitcoin ETFs have attracted nearly $819 million in investments.
This stark divergence in investor behavior underscores a critical assessment of the Grayscale Bitcoin ETF’s performance post-SEC approval. Initial enthusiasm, marked by a trading volume of over $2.3 billion on the ETF’s inaugural day, has cooled, with these outflows suggesting a shift in investor sentiment.
The withdrawal trend from the Grayscale ETF aligns with previous projections by analysts, which anticipated over $1 billion being pulled from the fund in the ensuing weeks.
A contributing factor to this outflow could be the fund’s relatively high expense ratio, which is 1.5% — the highest among U.S. Bitcoin ETFs. In comparison, other spot ETFs, including BlackRock’s IBIT and Fidelity’s FBTC, have seen substantial inflows of $500 million and $421 million within initial trading periods.
SEC’s historic approval of Bitcoin ETFs last week brought a lot of positivity and optimism into the industry. However, it has also sparked several controversies and concerns. Experts have cautioned against the potential risks of Coinbase’s dominance as the custodian of most ETFs.
The immediate supply shock after the SEC’s approval has also triggered significant volatility in Bitcoin’s value, as the leading cryptocurrency constantly fluctuates between $41,000 and $44,000.
Mohammad Shahidullah
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