Grayscale Bitcoin Trust loses $21 billion amid the success of other Bitcoin ETF
The fund is losing investors
Since its launch on January 11, 2024, the Grayscale Bitcoin Trust (GBTC) has seen over $21 billion withdrawn, making it the only Bitcoin exchange-traded fund (ETF) in the U.S. with a negative investment flow.
According to the Cointelegraph, as of December 16, total outflows from GBTC have reached $21 billion, with the fund losing an average of $89.9 million daily over the past 11 months, according to Farside Investors. While other spot Bitcoin ETFs in the U.S. have maintained positive net flows, GBTC’s massive outflows overshadow the combined inflows of nine competing funds.
These nine ETFs — including the Fidelity Wise Origin Bitcoin Fund, Bitwise Bitcoin ETF, ARK 21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, Franklin Bitcoin ETF, Valkyrie Bitcoin Fund, VanEck Bitcoin ETF, WisdomTree Bitcoin Fund, and Grayscale Bitcoin Mini Trust ETF — have collectively attracted $20.737 billion.
By comparison, BlackRock’s iShares Bitcoin Trust (IBIT) dominates the market with $35.88 billion in inflows, averaging $153.3 million daily since its launch. Despite GBTC's outflows, the overall spot Bitcoin ETF market has grown significantly, surpassing $35.5 billion in investments in less than a year.
Why Grayscale Bitcoin Trust is losing investors
Once considered a leading tool for Bitcoin investments, Grayscale Bitcoin Trust (GBTC) is now experiencing significant outflows. The primary reason is competition from a growing number of spot Bitcoin ETFs that offer more transparent and favorable conditions for investors.
Another critical factor is GBTC’s high annual fee of 2%, far exceeding the fees of newer ETFs like BlackRock’s iShares Bitcoin Trust, which charges only 0.25%. These factors have prompted investors to reallocate their funds to newer products that provide greater liquidity, lower costs, and a more accurate match to the asset's value.
Meanwhile, Grayscale Investments has announced the launch of two new investment trusts focused on Lido DAO (LDO) and Optimism (OP) tokens.
