- Grayscale’s Bitcoin Trust (GBTC) has moved about 113,000 bitcoin from its wallet to exchanges like Coinbase Prime since mid-January, with over $1 billion flowing out daily this week.
- Factors driving the outflows include GBTC’s still-high 1.50% fee post-conversion, falling assets under management, and availability of cheaper spot bitcoin ETFs.
- Rapid GBTC bitcoin sales are putting downward pressure on bitcoin’s price, which has dropped below $40k to its lowest since November. It’s unclear if outflows will slow.
GBTC Outflows Top $1 Billion Per Day
According to data compiled by Arkham, GBTC has moved nearly 113,000 bitcoin from its wallet since January 11, with the majority going to Coinbase Prime for sale. The Grayscale website showed the trust holding around 537,000 bitcoin on January 25, down about 100,000 BTC since January 11.
One caveat is that not all bitcoin moved from the Grayscale wallet may be related to redemptions, as outflows are split between Coinbase Prime and new custody addresses. However, the pace remains high at over $1 billion per day this week.
Factors Behind the Outflows
There are several reasons for the massive GBTC outflows:
- Grayscale cut its management fee to 1.50% after converting to a spot ETF, still over 100 bps higher than competing bitcoin ETFs.
- Assets under management at Grayscale have fallen by more than $1 billion daily this week.
- The availability of cheaper spot bitcoin ETFs has led investors to exit GBTC.
Impact on Bitcoin Price
The rapid pace of GBTC bitcoin sales is putting pressure on bitcoin’s price, which tumbled below $40,000 this week to its lowest since November 2022. Some bitcoin bulls hoped outflows would slow after FTX’s GBTC stake sale, but this has not happened yet.
In summary, GBTC is seeing massive bitcoin outflows to exchanges like Coinbase Prime as investors switch to cheaper spot bitcoin ETFs post-conversion. This is contributing to price weakness in bitcoin. It remains to be seen if outflows will slow down going forward.