Grayscale’s Bitcoin ETF ‘halving’, just before BTC halving

Crypto asset manager Grayscale’s Bitcoin (BTC) Spot Exchange-Traded Fund (ETF) has seen Bitcoins disappear every trading day since its launch on January 11th. After 66 days of trading on the New York Stock Exchange (NYSE), Grayscale’s Bitcoin ETF has already halved. Ironically, the famous Bitcoin halving will take place in three days, which has nothing to do with it at all.

Remarkable milestone for GBTC

The Grayscale Bitcoin Trust (GBTC) was founded in 2013 as a regular trust fund. After years of failed attempts, the fund’s conversion into a spot ETF was approved in January.

At the time of launch, Grayscale held more than 600,000 Bitcoins as collateral for its fund. To be precise, the asset was equivalent to 619,220 BTC.

To date, more money has been withdrawn from the fund on each trading day than has been received. With the exception of a few days, net outflows typically exceed $100 million and often reach hundreds of millions of dollars.

Vetle Lunde, senior analyst at crypto research firm K33 Research, said today on social media platform X knowledge that GBTC has already had to part with half of its Bitcoins since its ETF conversion.

The total outflow is 310,611 BTC. This represents a 50.16 percent reduction in the number of Bitcoins under management since GBTC was launched as a spot ETF.

Notably, the halving of Bitcoins managed by GBTC comes just three days before the highly anticipated Bitcoin halving. The next Bitcoin halving will take place on block 840,000, which will most likely be mined next Friday. This is the fourth halving in the network’s history, with miners’ rewards halved from 6.25 BTC to 3,125 BTC.

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Outflows from Grayscale’s Bitcoin ETF don’t stop

GBTC’s relentless outflows are largely due to the relatively high fees that Grayscale charges compared to its competitors. Some of the capital flight was also caused by large sales related to the bankruptcies of crypto exchange FTX and crypto lending platform Genesis Global Capital.

Last Wednesday, GBTC recorded its lowest net outflows since its launch, at $17.5 million each. Since then, however, outflows have increased sharply again. Over the last 4 trading days, the average daily outflow has been around $120 million, dampening the optimism that previously prevailed.

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