The Pause in Grayscale Bitcoin Trust’s Hold Over Spot Bitcoin ETF Selling as BTC Trades Between $42,580 and $43,422
On February 2, Bitcoin (BTC) experienced a trading range of $42,580 to $43,422, with the Grayscale Bitcoin Trust (GBTC) taking a break from its control over spot Bitcoin exchange-traded fund (ETF) selling.
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BlackRock and ProShares ETFs daily volume surpasses GBTC volume
The daily trading volume for BlackRock’s iShares Bitcoin Trust (IBIT) and ProShares’ Bitcoin Strategy ETF (BITO) exceeded that of Grayscale’s GBTC ETF on February 1st. Since their launch on January 11th, GBTC had dominated the spot Bitcoin ETF market in terms of daily volumes.
However, on February 1st, IBIT and BITO became the first of nine ETFs to surpass GBTC’s trading volume. Bloomberg Intelligence analyst James Seyffart shared data showing that IBIT had $301 million in volume and BITO had $298 million, while GBTC came in third with $292 million in trades.
Despite this, Seyffart noted that the total trading volume for all ETFs was lower than usual at $924 million. This was the first time since their launch that the daily trading volume for all ETFs was below $1 billion, with a cumulative trading volume of $28.30 billion.
As of February 2nd, GBTC was back on top with $240.68 million in trading volume. This highlights the competition between different ETFs and the constantly changing landscape of the cryptocurrency market.
The Decline of GBTC Selling Indicates the Rise of Web 3.0 Investment
Since the launch of the first spot Bitcoin ETFs, GBTC has dominated the market. However, heavy outflows from the trust have resulted in a decrease in its dominance. This can be attributed to investors now having the ability to redeem their investments, something that was not possible before.
Moreover, the high fees charged by Grayscale have led to a significant decrease in their assets, with over $5.8 billion being shed since January 11th, according to BitMEX Research. In contrast, the nine newly launched ETFs have seen combined inflows of $7.2 billion during the same period.
However, in recent days, the dominance of GBTC has started to decline. The average amount of BTC sent to the Coinbase crypto exchange by GBTC has decreased from $700 million to less than $300 million since January 26th, as shown by BitMEX Research data.
In terms of Bitcoin, there has been a decrease in outflows from GBTC, with 24,050 BTC being outflowed on Jan. 30th and 4,461 BTC on Feb. 2nd.
According to analysts at JPMorgan, the recent GBTC outflows were mainly due to profit-taking and are now “behind us,” which could potentially ease the pressure on BTC’s price.
It is also worth noting that as GBTC selling peaked, the FTX crypto exchange sold its entire shareholding of 22 million GBTC shares, worth approximately $1 billion.
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