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GBTC Bitcoin Trust ETF Holdings Halve Ahead of Halving

Since its first trade in January, the holdings of the Grayscale Bitcoin Trust ETF (GBTC) have significantly declined, dropping by 50%.

On April 16, GBTC held 309,871 BTC, a substantial decrease from the 619,220 BTC it held on its initial trading day, January 11. This reduction is commonly referred to as a “halving,” closely related to the highly anticipated Bitcoin halving event. During this event, mining rewards decreased from 6.25 BTC to 3.125 BTC, a 50% reduction.

GBTC has officially undergone the halving before the actual Bitcoin halving.

Over the course of 66 trading days following the conversion, Grayscale has seen a net outflow of 310,611 BTC. Since January 10, the managed Bitcoin holdings have decreased by 50.16%.

The decline in GBTC holdings occurred before the Bitcoin halving, adding another layer of significance to the timeline of Bitcoin-related events. However, it’s essential to note that these two events are not directly correlated.

The primary reason for GBTC’s capital outflow is attributed to high transaction fees. GBTC initially had the highest upfront fee among the ten US-listed spot Bitcoin ETFs, with a first-day trading fee of 1.5%.

In contrast, competitors offer lower fees ranging from 0.2% to 0.4%. This fee disparity has prompted investors to seek more competitively priced alternatives, resulting in significant capital outflows from GBTC.

Competition with BlackRock’s iShares Bitcoin Trust (IBIT)

In stark contrast to GBTC’s decline, BlackRock’s iShares Bitcoin Trust Fund (IBIT) has experienced substantial capital inflows. Since its listing, IBIT’s holdings have surged by over 10,000%. IBIT has an initial fee of 0.25%, coupled with a 0.12% discount on assets traded within the exemption period for the first $5 billion. This attractive fee structure has made it an appealing choice for cost-conscious investors. As of April 16, IBIT holds 272,548 BTC, trailing GBTC by only 13%.

Apart from GBTC and IBIT, other spot Bitcoin ETF providers have also witnessed significant increases in BTC holdings since their launch. As of April 16, the ten spot Bitcoin ETFs collectively hold approximately 862,162 BTC, with a total value of $54.7 billion. Despite the substantial reduction in GBTC holdings, the overall increase across ETF providers indicates that investor interest in Bitcoin remains persistent despite market fluctuations.

Sentiment: Neutral

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