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

Recently disclosed data from CoinShares indicates that Grayscale’s spot Bitcoin ETF (GBTC) experienced outflows exceeding $2.2 billion in the past week, significantly surpassing the total weekly inflows of its rivals.

ETF Outflows are Finally Subsiding

According to CoinShares’ report, newly launched spot Bitcoin ETFs in the United States attracted approximately $1.8 billion in inflows last week, in sharp contrast to GBTC’s staggering $2.2 billion loss.

The CoinShares report suggests that recent price declines, triggered by substantial outflows from the established ETF issuer Grayscale, totaling $5 billion since January 11, 2024, may have spurred additional outflows from other regions.

For example, the global outflows from digital asset products amounted to over $500 million, with $409 million of it originating from the United States. The report observed that outflows from GBTC were “gradually diminishing as the daily total continued to decrease over the course of the week.”

Grayscale’s FTX Connection

The news of GBTC’s substantial outflows coincided with the bankruptcy of the crypto exchange FTX, which liquidated its 22 million shares, estimated to be worth around $2 billion, from the spot Bitcoin ETF.

Following FTX’s decision to sell off GBTC shares, its affiliate company, Alameda Research, withdrew a lawsuit against Grayscale, Grayscale CEO Michael Sonnenshein, Digital Currency Group (DCG), and DCG founder Barry Silbert.

The lawsuit had alleged that Grayscale was improperly holding more than $9 billion of investors’ funds and $250 million of FTX creditors’ asset value within the exchange. Additionally, Alameda Research had claimed that Grayscale was imposing excessively high fee rates amounting to over $1.3 billion.

Currently, John Jay Ray III, a specialist attorney in the recovery of funds from distressed companies, is overseeing FTX’s bankruptcy estate.

“Grayscale is a crypto specialist,” CEO says

GBTC’s eventful week follows closely on the heels of Grayscale CEO Michael Sonnenshein discussing the status of newly approved spot Bitcoin ETFs in the United States. At the World Economic Forum earlier this month, Sonnenshein expressed his opinion, stating, “I don’t ultimately think that the marketplace will have all 11 spot products we find ourselves having.”

Nevertheless, Sonnenshein conveyed his confidence that his company’s spot Bitcoin ETF would endure in the long run. He emphasized that investors are carefully considering factors such as liquidity, track record, and the issuer’s credibility. In this regard, Sonnenshein highlighted Grayscale’s expertise in the crypto space, suggesting that their strong track record has paved the way for many similar products to emerge.

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