According to data, the largest cryptocurrency Bitcoin‘s (BTC) price has been under pressure due to a significant drop in BTC reserves held by Grayscale’s Bitcoin Trust (GBTC). On January 10, the U.S. greenlit the conversion of GBTC into a spot Bitcoin exchange-traded fund (ETF), which opened for trading the next day, leading to a 50% decrease in GBTC’s BTC reserves within about three months.
BTC Reserves Drop from 619,220 to 311,621 Units
It is noteworthy that despite the launch of nine new spot Bitcoin ETFs by major asset management firms like BlackRock and Fidelity, Grayscale’s existing Bitcoin Trust initially held approximately 619,220 BTC units before converting to an ETF. Since this transformation, GBTC’s BTC reserves have halved to 311,621 units.
Despite the significant drop in BTC reserves, GBTC continues to maintain its high fund management fee structure of 1.5%, compared to competitors like BlackRock’s IBIT which charges a 0.12% fee.
Although GBTC’s BTC reserves have decreased, the value of its assets under management in U.S. dollars has fallen less sharply, from $28.7 billion on January 11 to $19.8 billion, a 31% drop at current prices. This change significantly contributed to the redistribution of market share among U.S. spot Bitcoin ETFs, with BlackRock’s IBIT and Fidelity’s FBTC emerging as primary beneficiaries. GBTC’s market share, which was nearly 100% on its launch day, has now dropped to 37.3%, while IBIT holds a 32.2% share and FBTC has 17.8%.
Fund Flows in Spot Bitcoin ETFs
Meanwhile, in terms of fund flows, BlackRock’s IBIT and Grayscale’s GBTC remained the only U.S. spot Bitcoin ETFs to record activity on consecutive trading days. However, recent trends show heavier outflows from GBTC to inflows into IBIT, with ETF exits resulting in a net outflow of $36.7 million on April 15. As observed by CoinShares Research Head James Butterfill, while FBTC ended its 63-day inflow streak, IBIT continued to see inflows, extending its ongoing series to 65 days.
Meanwhile, the approval of several spot Bitcoin and Ethereum ETFs managed by leading firms like China Asset Management and Harvest Global by the Hong Kong Securities and Futures Commission (SFC) has created expectations in the cryptocurrency market. Despite significant demand expectations for these products, Bloomberg ETF analyst Eric Balchunas emphasizes that crypto ETFs in Hong Kong may struggle to significantly increase assets under management (AUM) in the short term.
Amid geopolitical tensions affecting market sentiment, Bitcoin’s price has seen a 10% decline over the last seven days, trading at $63,459. Despite this drop, the largest cryptocurrency has seen a 50% increase in price since the beginning of the year.
