Investors withdraw $5 billion from Grayscale Bitcoin Trust

Cryptocurrency investment products last week saw a total outflow of $500 million, exceeding the inflows into newly-opened U.S. bitcoin ETFs. James Butterfill, the head of research at CoinShares, highlighted that the total outflows from GBTC surpassed $5 billion since January 11.

Grayscale Bitcoin Trust (GBTC)

This mixed trend has been particularly pronounced in specific regions, with the United States, Switzerland, and Germany recording outflows of $409 million, $60 million, and $32 million respectively.

A major factor in these movements is the substantial outflow from Grayscale’s Bitcoin ETF (GBTC), recently converted from a closed-end structure. Since January 11, 2024, Grayscale has seen a total outflow of $5 billion. However, last week’s outflow of $2.2 billion from Grayscale indicates a possible slowing down, as daily totals showed a gradual reduction over the week. This massive outflow from Grayscale is believed to have triggered further outflows in other regions and has been a key driver in the recent price declines in the digital asset market.

In contrast to the outflows experienced by Grayscale and others, newly issued U.S. ETFs saw a strong influx of funds. Last week, these ETFs registered inflows of $1.8 billion, and since their launch on January 11, 2024, they have amassed a total of $5.94 billion in inflows.

On a net basis, including the inflows to Grayscale since their launch, the total inflow now stands at $807 million. CoinShares said that the initial price falls in the digital asset market, despite these positive flows, were largely due to the acquisition of Bitcoin seed capital prior to January 11.

Breaking down the latest statistics, Coinshares said Bitcoin has been the center of attention, experiencing outflows totaling $479 million. Conversely, short-bitcoin positions have seen an influx of $10.6 million. Altcoins mostly faced outflows, with Ethereum seeing $39 million leave, while smaller amounts were withdrawn from Polkadot and Chainlink, at $0.7 million and $0.6 million respectively.

CoinShares’ weekly survey shows a different trend with blockchain equities, which attracted further inflows of $17 million last week.