GBTC Outflows Topped $2.2 Billion Last Week, Outweighing All Spot Bitcoin ETF Gains: CoinShares

Newly released data reported by CoinShares reveals Grayscale’s spot bitcoin ETF (GBTC) saw over $2.2 billion in outflows last week, greatly outweighing the total weekly inflows of its competitors.

ETF Outflows are Finally Subsiding

According to CoinShares’ report, newly issued spot bitcoin ETFs in the U.S. saw an inflow of approximately $1.8 billion last week, in contrast to GBTC’s $2.2 billion loss.

“Recent price declines prompted by the substantial outflows from the incumbent ETF issuer (Grayscale) in the US totaling US$5bn (since 11th January 2024), have likely prompted further outflows from other regions,” the CoinShares report reads.

For instance, global outflows of digital asset products totaled over $500 million, with $409 million of it coming from the United States. The report noted that outflows from GBTC were “beginning to subside as the daily total continued to reduce over the week, however.”

The outflows in Grayscale aren't pretty but it looks like they are beginning to subside. pic.twitter.com/IZXHZWbiKG

— James Butterfill (@jbutterfill) January 28, 2024

Grayscale’s FTX Connection

News of GBTC’s major outflows follows bankrupt crypto exchange FTX, dumping its 22 million shares—worth an estimated $2 billion—from the spot bitcoin ETF.

Following FTX’s selling off of GBTC, its sister company Alameda Research dropped a lawsuit against Grayscale, Grayscale CEO Michael Sonnenshein, Digital Currency Group (DCG), and DCG founder Barry Silbert.

The complaint alleged that Grayscale was improperly holding more than $9 billion worth of investors’ funds and $250 million worth of FTX creditors’ asset value inside of the exchange. Additionally, Alameda Research claimed that Grayscale was charging them exorbitant fee rates totaling over $1.3 billion.

John Jay Ray III, an attorney who specializes in recovering funds from troubled companies, is currently in charge of overseeing FTX’s bankruptcy estate.

“Grayscale is a crypto specialist,” CEO says

GBTC’s turbulent week comes shortly after Sonnenshein discussed the status of newly approved spot bitcoin ETFs in the U.S.“I don’t ultimately think that the marketplace will have ultimately these 11 spot products we find ourselves having,” Grayscale CEO Michael Sonnenshein told CNBC this month at the World Economic Forum.

Sonnenshein stated his belief that his company’s spot bitcoin ETF will stand the test of time, however.

“Investors are weighing heavily things like liquidity and track record and who the actual issuer is behind the product,” Sonnenshein continued. “Grayscale is a crypto specialist. And it has really paved the way for a lot of these products coming through.”