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Grayscale's GBTC Nears Outflow Record

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Tue, 12/03/2024 - 19:47
Grayscale's GBTC Nears Outflow Record
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Grayscale's Bitcoin Trust (GBTC) is nearing a record outflow, according to recent data

With a significant $10.6 billion outflow, it is the second-largest in cumulative outflows among Exchange Traded Funds (ETFs) over the past 15 years. 

It is trailing only behind the iShares MSCI Emerging Markets ETF (EEM), which has seen an outflow of $12.3 billion.

Largest inflows and outflows 

Vanguard's S&P 500 ETF (VOO) leads the inflow chart with $258.6 billion, followed closely by iShares Core S&P 500 ETF (IVV) and Vanguard Total Stock Market ETF (VTI), indicating a strong investor preference for traditional equity assets. 

On the other end of the spectrum, alongside GBTC, ETFs such as SPDR Gold Shares (GLD) and SPDR S&P MidCap 400 ETF Trust (MDY) are experiencing the largest outflows.

Related

Gold ETFs are seeing net outflows as investments flow into bitcoin ETFs and exchange-traded products. With bitcoin's recent price surge and the rising inflows into bitcoin-related funds, analysts suggest that the cryptocurrency could be on track to challenge gold's long-held status as the primary safe-haven asset. Despite the current trend, gold ETFs still hold a significantly larger market capitalization compared to bitcoin's combined ETP and ETF market cap 

Grayscale's strategic response 

In a strategic move, Grayscale is launching a "mini-me" low-fee version of its GBTC product, labeled $BTC. 

Investors in the original GBTC will have the opportunity to move into the new fund without a tax hit through a special dividend, a move that market analysts had predicted and see as a "no-brainer." 

The new fund is expected to have a lower fee, and its approval is pending by the Securities and Exchange Commission (SEC). 

This introduction of a lower-cost alternative mirrors the approach taken by other entities such as BlackRock with their mini-fund IEMG, and the Gold MiniShares Trust (GLDM). It aims to to provide more cost-effective investment options to clients.

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