Grayscale Bitcoin Shares Surge On First Inflow Since January

Matthew Broersma,
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Dominant Bitcoin ETF Grayscale Bitcoin Trust shows first net inflow since January as investors flock to new crypto investment vehicles

Shares in Grayscale Bitcoin Trust (GBTC) jumped on Monday after the fund achieved its first net positive inflows since January, when it converted from a trust to an easily tradable exchange-traded fund (ETF).

The shift is a major milestone for GBTC, which was previously the largest conventional investment vehicle for those looking to invest in Bitcoin without directly purchasing the cryptocurrency, before competition arrived in the form of Bitcoin spot ETFs that were approved for the first time by the US Securities and Exchange Commission (SEC) in January.

At that time GBTC converted to an ETF at the same time that nine competing spot ETFs began trading.

Since then it has seen $17.46 billion (£13.9bn) in withdrawals until it achieved a $63m net inflow on Friday, 3 May, according to data from Farside.

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Crypto revival

GBTC remains the largest Bitcoin spot ETF with about $18.1bn in assets, compared to second-biggest rival BlackRock’s iShares Bitcoin Trust (IBIT), which grew from zero in January to $16.9bn.

Grayscale’s fund previously had more than $26bn in assets.

The withdrawals are in part due to Grayscale’s much higher fees than competing funds and also result from a wave of bankruptcies in the crypto sector, as companies that collapsed over the past two years, including FTX and Genesis, liquidated their holdings to repay creditors.

The SEC’s move to approve spot Bitcoin ETFs in early 2024 has spurred a major resurgence in the price of the cryptocurrency, which has risen about 49 percent since the beginning of the year.