Grayscale, the world’s largest crypto asset manager, has experienced a significant decrease in its Bitcoin (BTC) holdings since converting its Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF) in mid-January. 

According to recent data from BitMEX Research, GBTC saw its 36th consecutive day of outflows on March 4. 

During this period, 5,450 BTC, equivalent to approximately $368 million, left the trust. Since the conversion to an ETF, the total outflow has reached a staggering $9.26 billion.

Grayscale’s Bitcoin Holdings Drop by 33%

Prior to the ETF conversion, Grayscale held around 620,000 BTC, as reported by Coinglass. 

The launch of the spot Bitcoin ETF by Grayscale introduced a new feature where investors could redeem their shares for Bitcoin, something that was not possible in the previous structure. 

Additionally, GBTC’s higher fees compared to other ETFs, such as BlackRock’s IBIT and Fidelity’s FBTC, may have contributed to the outflows.

Currently, the GBTC fund holds 420,682 BTC, which is estimated to be worth around $28.8 billion based on current prices, according to information available on its website and portfolio. 

Market observers have been speculating about when the “Bitcoin bleed” in GBTC might come to an end.

While GBTC outflows slowed down in late January and February, some analysts believed they could be nearing their conclusion. 

However, in mid-February, bankruptcy courts permitted crypto lender Genesis to liquidate approximately $1.3 billion worth of GBTC shares as part of efforts to reimburse investors.

ETF analyst Eric Balchunas from Bloomberg previously suggested that the outflows would likely stop once GBTC experienced a 25% reduction in outstanding shares. 

However, a poll on X indicated that most respondents expected the bleed to end in the range of 35-50%.

GBTC has bled 13% of its shares outstanding. How high do you think that number get before the mass exodus stops?

— Eric Balchunas (@EricBalchunas) January 23, 2024

Other Spot Bitcoin ETFs See Consistent Inflows

In contrast, the other nine spot Bitcoin ETFs have exceeded expectations amid the ongoing Bitcoin rally. 

On March 4, data revealed that it was the second-largest volume day for these ten ETFs, with approximately $5.5 billion in volume. 

The BlackRock IBIT fund alone had a daily volume of around $2.4 billion, and its assets under management have now surpassed $11 billion.

Each of the new ETFs has also witnessed a volume increase of over 30% in just six days, contributing to the continued flow of funds. 

Fidelity experienced a record day for inflows on March 4, with preliminary data from Farside Investors indicating $404.6 million in inflows which more than offset the GBTC outflows.

The Bitwise Bitcoin ETF (BITB) also performed well, attracting $91 million in inflows, marking its highest inflow since February 15. 

The strong inflows in spot Bitcoin ETFs has further pushed the price of BTC higher. 

On Monday, the flagship cryptocurrency was last higher by 9% at a daily high of $68,785, according to data by CoinMarketCap. 

The figure is just inches away from its all-time high of $68,789 recorded in November 2021. 

Bitcoin lifted other crypto tokens, especially meme coins. Dogecoin (DOGE) surged 32%, while Shiba Inu (SHIB) coin rocketed 95%.

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