Near-record outflows from Grayscale’s spot bitcoin ETF offset another monster day for BlackRock’s fund, as the category’s net inflow total took a hit Thursday.
The Grayscale Bitcoin Trust ETF (GBTC) on Thursday bled $598 million, according to BitMEX Research data — the second-highest total in a single day since it converted to an ETF on Jan. 11.
Inflows into BlackRock’s iShares Bitcoin Trust (IBIT) remained strong, breaking $600 million for a second straight day to offset the GBTC outflows. Competing offerings did not contribute much net inflows, with second-best Fidelity seeing $45 million from its bitcoin ETF, and others seeing little or none.
Overall, net inflows for all 10 US spot bitcoin ETFs dropped from a record $673 million Wednesday to $92 million on Thursday, the data indicates.
The segment’s net flows — money moving into and out of the funds — have served as a new barometer for investors’ bitcoin demand since the Securities and Exchange Commission approved the long-awaited ETFs last month.
Some industry watchers have excluded GBTC’s daily outflows while evaluating the ETF segment, in part given its significantly higher 1.5% fee and the expectation that a portion of investors would flee the fund.
GBTC launched in 2013, and many investors chose to hold onto their GBTC shares in recent years rather than sell them at a discount on the secondary market. The fund’s conversion to an ETF essentially eliminated that discount.
The 10-fund US bitcoin ETF category has absorbed GBTC’s roughly $8.4 billion of outflows in the past seven weeks — totaling net inflows of about $7.5 billion.
Interest in the products — giving a wider set of investors easier access to BTC — has helped drive up the price of bitcoin above $60,000 in recent days, Bitwise chief investment officer Matt Hougan said during a Thursday interview with CNBC. He added that bitcoin’s supply-demand dynamic is “off the hook.”
IBIT’s $604 million of net inflows on Thursday was just below its all-time high of $612 million, set on Wednesday.
Outflows from Grayscale’s bitcoin fund were $216 million on Wednesday before jumping to nearly $600 million.
Some industry watchers in X posts speculated that the outflows could be driven in part by bankrupt lender Genesis, which was granted approval earlier this month to offload roughly $1.6 billion worth of GBTC shares.
A Genesis spokesperson did not immediately return a request for comment.
The high level of assets leaving GBTC comes after outflows from the fund had slowed within the last week — totaling as low as $22 million on Monday.
Sumit Roy, a senior analyst at ETF.com, told Blockworks earlier this week that the initial selling by arbitrageurs and those wanting to move to cheaper funds is “largely over.”
“If we see bitcoin enter a correction or a steeper sell-off, GBTC’s outflows will likely pick up again,” he added. “This will remain the case as long as GBTC is so much more expensive than other spot bitcoin ETFs.”
Though there wasn’t a steep sell-off on Thursday, bitcoin’s price stalled on the day after it shot up to about $64,000 on Wednesday. The price of one BTC stood at roughly $62,000 at 6 am ET Friday — down nearly 1% from 24 hours prior.
Lara Crigger, editor-in-chief of data firm VettaFi, said ETF investors have shown that fees and performance — in that order — are the top two factors they consider when choosing their allocations.
“With [10 funds] all tracking the same basic asset — spot bitcoin — Grayscale likely can’t distinguish itself through performance, which leaves fees,” she said. “With an expense ratio of 1.5%, Grayscale’s spot bitcoin ETF stands out on fees, but maybe not in the way an ETF issuer would hope.”