Grayscale Is Losing the ETF Game, Transfers $800 Million More to Coinbase

In the initial days of trading as an ETF, Grayscale Bitcoin Trust (GBTC) has witnessed a substantial outflow of funds, with investors withdrawing approximately $579 million, as reported by Bloomberg on Tuesday. This comes in sharp contrast to the positive trend observed in the other nine spot Bitcoin ETFs, which collectively attracted nearly $819 million.

On January 16, GBTC transferred 8,730 Bitcoin, valued at over $376 million, to Coinbase Prime deposit addresses, as per data from blockchain analytics platform Arkham Intelligence. This has raised speculation that the fund might have been compelled to sell Bitcoin holdings amid a decline in its share price.

Analysts argue that these outflows from GBTC are potentially influencing the downward trend observed in Bitcoin’s price over the preceding days. 

Cambria Gold Mines — sponsored Sponsored · Cambria Gold Mines

GBTC, one of the world’s largest holders of Bitcoin, was one of the funds that received approval from the Securities and Exchange Commission (SEC) to convert into an ETF last week. Since this conversion, authorized participants gained the ability to purchase shares from investors and redeem them for the cash equivalent of the Bitcoin they represent. Consequently, the trust is obligated to sell off Bitcoin to meet these redemptions, typically occurring when the GBTC price is lower than the Bitcoin value it holds.

On January 12, Arkham data indicated a $41 million transfer to a Coinbase Prime wallet, suggesting a potential Bitcoin sale by the trust. Analysts speculated that this outflow might have contributed to Bitcoin’s sharp decline on that day.

Bloomberg analyst Eric Balchunas claimed on X that GBTC experienced outflows of $95.1 million on January 11 and $484.1 million on January 12. In contrast, other Bitcoin ETFs like the iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund saw inflows of nearly $1.4 billion over the same period.

Analysts aren’t at all surprised by the outflows, and many traders are pointing to GBTC’s high fees. The fund charges a 1.5% management fee, while the second-most expensive fund, the VanEck Bitcoin Trust, charges 0.25%.

X user MartyParty, a crypto commentator and host of Crypto Traders Club Space, noted that GBTC transferred another 19,000 Bitcoin, which converts to about $800 million to Coinbase as the markets opened on January 17. GBTC has yet to comment on the matter.


Information for this story was found via Bloomberg, X, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

The Gold & Copper Stocks Everyone Keeps Asking About | Oct. 12-16 – Weekly Mining Mailbag

Similar Gold Mines Are Valued 10X Higher. Why Not This One? | JW Dumont – Granada Gold Mine

The US Interest Bill Gold Can’t Ignore | Peter Grandich

Recommended

First Majestic Produces 3.4 Million Ounces of Silver in Q3 2026, Jerritt Canyon Restart Remains on Track

Altamira Gold Drills 134 Metres of 0.5 g/t Gold at Maria Bonita, Hole Ends in Mineralization

Related News

Brazil’s Crypto Bill Now Awaits Approval By Bolsonaro, Who Once Said “I Do Not Know What Bitcoin Is”

Brazil’s lower house of Congress approved a bill aimed at boosting oversight of the country’s...

Wednesday, November 30, 2022, 10:49:00 AM

Bitcoin Continues to be the Most Abused Cryptocurrency, Europol Report Finds

In a recent report by Europol, Bitcoin has been identified as the most commonly exploited...

Thursday, July 25, 2024, 02:05:00 PM

Crypto Trading Hits Record $10 Trillion in November on Regulatory Optimism

Cryptocurrency trading volumes surged to a record high in November, with more than $10 trillion...

Thursday, December 5, 2024, 12:32:00 PM

US Prosecutors Charge BitMEX Cryptocurrency Founders for Disregarding Money Laundering Rules

It appears that allegations of fraud are not just subject to major world banks –...

Friday, October 2, 2020, 01:04:00 PM

PayPal Will Now Allow Customers to Make Transactions Using Cryptocurreny

As the world continues down the digitization path, especially amid pressure stemming from the coronavirus...

Wednesday, October 21, 2020, 04:44:58 PM