According to blockchain intelligence firm Arkham, Grayscale’s Bitcoin spot ETF, GBTC, is projected to exhaust its Bitcoin holdings in approximately 96 days at the current selling pace. The potential reduction or cessation of GBTC’s selling pressure in the Bitcoin market could lead to a significant increase in institutional investor demand for physical purchases, potentially driving up the price of Bitcoin.
At the current rate of redemptions, GBTC runs out of Bitcoin to sell in 96 DAYS.
Since GBTC started trading as an ETF on 11th January, Grayscale has transferred 266.47K BTC out of their wallets for GBTC redemptions.
That’s a rate of 25.9K BTC per week. pic.twitter.com/tMT7T73ena
— Arkham (@ArkhamIntel) March 23, 2024
Grayscale has recently filed for a new low-fee ETF, and the company’s CEO, Michael Sonnenshein, has hinted at the possibility of lower fees for GBTC in the future.
Typically, when a product is early in its lifecycle and newly introduced, its fees tend to be higher. As those markets mature and funds grow, fees tend to decline. We expect the same to be true for GBTC.
Since the launch of GBTC on January 11, Grayscale has moved a total of 266,470 BTC from wallets for redemption, with an outflow rate of around 25,900 BTC per week.
The total outflow from GBTC, as of the 21st, was approximately $13.8 billion, in contrast to the $13.3 billion inflow into BlackRock’s iShares Bitcoin Trust (IBIT). The high redemption demand for GBTC is attributed to its conversion to a physical ETF and its relatively high management fee of 1.5% compared to competitors, which range from 0.2% to 0.5%.
The sale of GBTC by the bankrupt Genesis and FTX has also contributed to the outflow. However, Bloomberg analyst Eric Balciunas believes that the outflow will subside once the Genesis sale passes.