The recent transition of Grayscale's bitcoin fund to an ETF has seen substantial outflows, significantly influenced by the FTX bankruptcy estate's actions, as reported by CoinDesk.
FTX, once a titan in the cryptocurrency realm, liquidated its entire stake in the Grayscale Bitcoin Trust, selling 22 million shares valued at approximately $900 million. This massive divestiture is a key component of the over $2 billion in shares sold from the Grayscale Bitcoin Trust (GBTC) since its conversion to an ETF earlier this month.
Grayscale's fund, notable for being the first of its kind to begin trading, has experienced more significant outflows compared to its peers, partly due to FTX's large-scale sell-off. The trust, which was a closed-end fund with a valuation of $27 billion prior to its conversion upon receiving the SEC's nod on January 11, has not immediately commented on these developments, as per Business Insider.
Even before the SEC's authorization of spot ETFs, a competitive fee landscape was emerging in the sector. Grayscale's rivals were offering fees ranging between 0.2% to 0.9%, while GBTC has a fee structure of 1.5%.
Despite initial expectations that the approval of ETFs would bolster bitcoin's value, both the cryptocurrency and GBTC shares have witnessed a decline since January 11, dropping 13.69% and 12.68% respectively.
Before the SEC's green light, Standard Chartered had projected a bullish scenario for bitcoin, predicting its value could soar to $200,000 by the end of 2025. This forecast hinged on the assumption that U.S. spot ETFs would hold between 437,000 and 1.32 million new bitcoins by the end of 2024. Geoff Kendrick, Head of FX Research at Standard Chartered, had estimated that inflows in the current year could range from $50 billion to $100 billion.
