Grayscale's Spot Bitcoin ETF has experienced a significant outflow of approximately $1.1 billion, underperforming in the past three days of trading. Investors have been withdrawing from the fund, particularly after its discount narrowed to its lowest level in almost three years.
On just the third day of trading, January 16, the fund saw outflows of $594 million, as reported in a post by Bloomberg ETF analyst James Seyffart on X (formerly known as Twitter).
Seyffart noted that while other newly launched Bitcoin ETFs have seen inflows, it's uncertain if these were enough to offset the nearly $600 million outflow from the Grayscale Bitcoin Trust (GBTC) on that day.
Seyffart and other analysts have pointed out that discrepancies in flow calculations can arise due to the accounting and settlement processes involved in stock trades.
Historically, GBTC was a profitable venture for investors who borrowed to invest in the fund, capitalizing on the Grayscale premium, which reached a high of 43% in July 2019, according to YCharts. However, this changed in February 2021 when premiums turned into discounts, trapping many investors due to a minimum six-month lock-up period for GBTC shares.
After GBTC's conversion to a spot ETF, the discount has lessened to 1.55%, leading long-term investors to start exiting. The estimated outflow of $1.17 billion from GBTC is equivalent to about 27,000 Bitcoins, based on the current price of approximately $42,800.
In the broader context, including GBTC, nine other spot Bitcoin ETF issuers collectively hold 35,761 Bitcoins. Data from CC15Capital shows that alongside Grayscale's 605,891 BTC, BlackRock and Fidelity’s ETFs hold 11,439 and 9,750 BTC, respectively. However, these Bitcoin holdings for each ETF issuer may not be completely up-to-date.
Meanwhile, Cathie Wood's ARK Invest has been actively investing in its newly approved ARK 21Shares Bitcoin ETF (ARKB) and reducing its holdings in the Proshares Bitcoin Strategy ETF (BITO) and other tech-focused stocks in the ARK Next Generation Internet ETF. ARKB currently possesses 2,535 Bitcoins, valued at over $109 million, ranking it as the fifth-largest Bitcoin holder among the 10 spot Bitcoin ETF issuers.
