Leading crypto-specific asset manager Grayscale Investments has lost over $20.4 billion through outflows from its Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs).
According to data gathered from Farside Investors, the Grayscale Bitcoin Trust ETF (GBTC) has lost $137.7 million per day on average over the seven months since its conversion from a close-ended fund. The other spot Bitcoin ETFs keep mostly seeing net positive capital flows.
BlackRock’s iShares Bitcoin Trust (IBIT) specifically tops the chart when it comes to assets under management, with $19.93 billion in Bitcoin. It is followed by Fidelity’s Wise Origin Bitcoin Fund (FBTC) with its $9.9 billion, Cathie Wood’s ARK 21Shares Bitcoin ETF (ARKB) with $2.6 billion and the Bitwise Bitcoin ETF (BITB) currently holding $2.09 billion.
Farside Investors data also shows that Grayscale’s Ethereum Trust (ETHE) has so far fared similarly. ETHE has lost $1.72 billion in just five days, leading to Grayscale’s derivatives losing $20.58 billion to outflows. The product has lost 18.7% of their initial seed funds of nearly $9.2 billion.
Steno Research senior analyst Mads Eberhardt expects this rate of outflows out of Grayscale’s ETFs to cease by Aug. 2. Furthermore, he sees such outflows as a reason to be bullish in the short-term.
The Ethereum ETF net outflow is yet to subside, but it is likely that it will happen this week. When it does, it’s up only from there. pic.twitter.com/mJqbcyUTp5
— Mads Eberhardt (@MadsEberhardt) July 29, 2024
Eberhardt further explained that the outflows from Grayscale’s crypto derivatives have already substantially diminished. He further explained:
Since the Grayscale Ethereum ETF has experienced a much higher outflow relative to AUM, we believe that peak outflow will occur sometime this week.
Pseudonymous trader Evanss6 shared a similar outlook. He compared data from the launch of Bitcoin and Ethereum ETFs. He concluded that “Grayscale selling is finite.”
Have a look at the two ETF launches side by side
BTC ETF (0 on x-axis = Jan 10th):
-bottomed on Day 12 (Trading Day 7)
-bottom occurred at ~21.5% off local peak
-bottom occurred at cumulative Grayscale outflows of ~13.2%
-proceeded to rip ~92% in 50 days
ETH ETF (0 on x-axis =… pic.twitter.com/jsmcYu0UD0
— Evanss6 (@Evan_ss6) July 29, 2024
The report follows recent data showing that on their second day of trading, United States-based spot Ethereum exchange-traded funds (ETFs) recorded net outflows of $113.3 million. This negative trend registered in the overall Ethereum ETF market was largely driven by significant withdrawals from Grayscale’s Ethereum Trust alone.
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