How long until Greyscale’s ETF runs out of Bitcoin?

There are many reasons why Greyscale's Bitcoin spot ETF fund is hemorrhaging cash as investors rush for the door – often to jump to a competing product. Is there an end in sight? And will grayscale be ok?

Basically, from a closed-end fund to a Bitcoin Exchange Traded Fund (ETF) By January, investors were hitting the redemption button — and fast. very quickly GBTC Since March 2009, it has experienced the highest ETF inflows of more than $15 billion.

The fund currently has over 328,012 BTC, according to its website. That's $22.6 billion of the cryptocurrency. GBTC started the year with over 618,000 BTC, which means an average flow of 5,092 BTC per day.

If the bleeding continues at this rate, “digital gold” will dry up by July 8.

There's good news for Greyscale: GBTC can't sustain that momentum, as outflows have slowed down significantly. Only $75 million left the fund yesterday.

“My guess is that outflows will slow down,” said James Seifert, ETF research analyst at Bloomberg Intelligence. Decrypt.

To offset the flows, Grayscale has an equivalent. presented Another “mini” Bitcoin ETF to offer lower fees to compete better. But while it waits for approval, other funds, like BlackRock's most popular iShares Bitcoin Trust, are attracting high returns. He attracted as much as the Black Rock Fund 10 billion dollars in new funds in one day.

“Time is the enemy now. [the mini Bitcoin ETF] It goes through a normal regulatory process,” said Todd Sonn, an ETF and technical strategist at Strategas Securities, which goes to other products every day. [Grayscale] He missed that.

What leads to rapid flow? Son earlier They spoke Decrypt Surviving holders who wanted to leave this vehicle for a cheaper ETF were part of the reason.

And in addition to higher fees, this migration is also driven by failed crypto companies like FTX and Genesis that are vulnerable to grayscale.Shouting back Money for customers.

Although there are flows – this means BlackRock's iShares Bitcoin Trust. Catch up quickly In terms of assets under management—the grayscale business model may still be good. The fund has $21.7 billion and is still generating good cash flow, ETF analysts say.

Bloomberg Intelligence ETF analyst Eric Balchunas said. Decrypt: “I don't know how much money exactly [Grayscale] They have to run their business, but a billion-dollar ETF that charges 1.5% is a nice little income earner — more than 22 times that.

He added that Bitcoin's price appreciation is only helping the fund manager and subsidizing his expenses. If the price of bitcoin takes a big nosedive, it will hurt the business, he added.

But since the SEC gave the green light to ETFs in January, Bitcoin's value is up more than 40%. It hit an all-time high of nearly $74,000 last month.

“Given the power of ETFs and that stimulus, and Half of it It's coming, in terms of revenue, grayscale will be good for a while,” added Balchunas.

“Greyscale can be good as a business — they still have assets north of $20 billion,” Seifert added.

For his part, Grayscale said. Decrypt That there is nothing to worry about and that this situation was all expected. It's almost thanks to them that the Bitcoin ETF hype is so hot right now.

In an amazing time for the crypto industry last year, a judge Side by side with the gray In a lawsuit, Wall Street's biggest regulator agreed with the firm that it had no coherent explanation for saying no to plans to convert to ETFs after years of bankruptcy.

The ruling essentially clears the way for the SEC to give the green light for Bitcoin ETFs to begin trading on US stock exchanges.

Without Grayscale taking the SEC to court, investors may not have the choice of Bitcoin investment products they do now.

“The Greyscale team is incredibly proud of the work we've done to grow GBTC into the world's largest Bitcoin investment vehicle, paving the way for all Bitcoin ETFs to come to market,” the spokesperson said. Decrypt.

Edited by Ryan Ozawa.