Bloomberg Intelligence has revealed that Grayscale’s Bitcoin ETF is experiencing substantial outflows, with a total of about $579 million withdrawn. This figure is particularly noteworthy in the wider Bitcoin ETF market landscape. In contrast, other direct Bitcoin ETFs have seen a surge in investments, totaling close to $819 million.
This sharp contrast in investment trends highlights a critical reevaluation of Grayscale’s Bitcoin ETF performance following its SEC approval. Although the ETF initially saw a high trading volume of over $2.3 billion on its first day, enthusiasm seems to have waned, as indicated by these recent withdrawals, suggesting a change in investor .
Analysts had previously predicted that more than $1 billion might be withdrawn from the fund in the following weeks, a forecast that aligns with the current withdrawal trend from the Grayscale ETF. One factor possibly influencing this outflow is the fund’s relatively steep expense ratio of 1.5%, the highest among Bitcoin ETFs in the U.S. Meanwhile, other spot ETFs like BlackRock’s IBIT and Fidelity’s FBTC have witnessed significant initial inflows of $500 million and $421 million, respectively.
The SEC’s recent landmark approval of Bitcoin ETFs introduced a wave of optimism in the sector, but it also sparked various debates and concerns. Industry experts have voiced caution over the potential risks associated with Coinbase’s dominant role as custodian for most ETFs.
Furthermore, the immediate market reaction to the SEC’s approval has led to considerable fluctuations in Bitcoin’s price, with the premier cryptocurrency oscillating between $41,000 and $44,000.