I am back again with a #cryptomonday story for #februaryinleo. Today we will focus on Grayscale ETF, which got over $44M in outflows on February 23rd. the lowest daily volume since they transitioned into an ETF. As everyone seems to use the magical word ETF, Grayscale's Bitcoin Trust (GBTC) decided to transform into an ETF (exchange-traded fund), as the over-the-counter product that was initially became something else. The technical bits are a bit fuzzy, but there you go, and a new ETF was born, ready to get all the suckers' money (pardon me, investors), as you need them when you want to invest in BTC, instead of using a wallet and buying directly the Bitcoin.
Where should we start? At the end of January, GBTC reported outflows south of $5.60B, with $0.64B exiting on January 22nd alone. February was a bit better, but since it started, GBTC had more than $7.4B withdrawn from the fund. Just to compare, Blackrock had more than $6.5B in inflows, and Fidelity had more than $4.6 B. On the third place, with much less, Ark21Shares had 'only' $1.4B coming in.
Every good economist predicted this, as the ETF approval by the SEC let the GBTC holders convert and redeem their shares. I would have done the same, if you think that GBTC was greedy enough to charge a 1.5% annual management fee, as opposed to the rest of them charging less than 0.20%. To add more fuel to the fire, the bankrupted now Genesis was granted court permission to sell $1,3B GBTC shares to pay the creditors back.
It looks like most of the big players are only eyeing Blackrock, Fidelity, IBIT and FBTC, ignoring GBTC completely. What do you think about it?
All the best,
George
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