Grayscale Sees Record Outflows From Bitcoin ETF But Remains Bullish Despite Competition

Grayscale’s Bitcoin ETF is seeing record outflows, but the company remains optimistic and is even rolling out new strategies.

Grayscale Bitcoin ETF

Grayscale’s Bitcoin ETF is experiencing significant outflows. Since transitioning from a closed-end fund to a Bitcoin ETF in January, it has seen a record $15 billion in outflows. Grayscale’s holdings have been reduced to 328,012 BTC, or $22.6 billion at current rates.

The fund loses an average of 5,092 BTC every day. If this continues, Grayscale’s bitcoin reserves will be depleted by July 8. However, the rate of outflows has slowed, with only $75 million in outflows recently. That points to a possible slowdown in the withdrawals.

To stay competitive, Grayscale is proposing a new, lower-cost Bitcoin ETF, aiming to retain and attract investors amid fierce competition from funds like BlackRock’s iShares Bitcoin Trust, which has seen inflows of up to $10 billion in a single day . However, the new fund has not yet been approved. The rapid outflows can be explained by investors seeking cheaper alternatives and the aftermath of bankrupt crypto companies such as FTX and Genesis.

Despite these challenges, there is still a future in Grayscale’s business model, according to market watchers. With $21.7 billion in assets and ongoing income, analysts believe the fund is in a strong position, especially as the increased bitcoin price has strengthened its financial position (measured in dollars).

Grayscale’s efforts have significantly shaped the Bitcoin ETF market, most notably with a crucial legal victory against the SEC that opened the door for more Bitcoin ETFs in the US.