Grayscale Bitcoin Trust ETF Holdings Halve Ahead of Halving

Since its trading debut in January, Grayscale Bitcoin Trust ETF (GBTC) has experienced a notable decrease in its holdings, dropping by 50%. 

On April 16, GBTC held 309,871 BTC, marking a stark reduction from the 619,220 BTC it had on its first day of trading on January 11. This decrease, often referred to as a “halving,” coincided closely with the much-anticipated Bitcoin halving event, where the mining reward was reduced by 50% from 6.25 BTC to 3.125 BTC.

GBTC has officially halved ahead of the halving.

Grayscale has seen net outflows of 310,611 BTC in the 66 trading days since its conversion. That's a 50.16% reduction in Bitcoins Under Management since January 10. pic.twitter.com/zghV2fiasf

— Vetle Lunde (@VetleLunde) April 17, 2024

The decline in GBTC holdings, occurring just before the Bitcoin halving, adds another layer of significance to the chronology of Bitcoin-related events. However, it’s essential to note that the two events do not directly correlate.

The outflows from GBTC have been attributed primarily to high trading fees. GBTC initially started with the highest fees among the 10 spot Bitcoin ETFs in the United States, at 1.5% on the first day of trading. 

In contrast, competitors were offering lower fees, ranging from 0.2% to 0.4%. This disparity in fees prompted investors to seek alternatives with more competitive fee structures, leading to substantial outflows from GBTC.

Rivalry with BlackRock’s iShares Bitcoin Trust (IBIT)

In contrast to GBTC’s decline, BlackRock’s iShares Bitcoin Trust (IBIT) has experienced significant inflows, with its holdings surging by over 10,000% since its trading debut. IBIT started with a 0.25% fee, coupled with a 0.12% discount for the first $5 billion of traded assets during the waiver period, making it an attractive alternative for investors seeking lower fees. As of April 16, IBIT held 272,548 BTC, positioning itself just 13% behind GBTC in terms of holdings.

Apart from GBTC and IBIT, other spot Bitcoin ETF providers have also witnessed substantial accumulations of BTC since their trading launch. Collectively, the 10 spot Bitcoin ETFs held approximately 862,162 BTC as of April 16, 2024, amounting to $54.7 billion. While GBTC’s decrease in holdings has been significant, the overall accumulation by various ETF providers indicates continued investor interest in Bitcoin despite market fluctuations.

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