GBTC’S MARKET SHARE FALLS TO 30%

Grayscale Bitcoin Trust (GBTC) witnessed a significant decline in market share, dropping to around 30% last week due to substantial outflows.

Since the advent of spot Bitcoin ETFs earlier this year, GBTC has experienced notable outflows, leading to a decrease in its Assets Under Management (AUM) to $23.7 billion as of Thursday.

Despite maintaining its leading position in the market, Grayscale’s market share has been dwindling.

Between January 11-21, GBTC dominated the spot ETF market with over 50% of trade volumes. However, recent data from Kaiko indicates a sharp decline, with its share dropping to approximately 30% last week.

Grayscale’s decision to set the management fee for its converted ETF at 1.50%, exceeding its competitors’ fees by more than 100 basis points, may have prompted ETF holders to seek cheaper alternatives.

While the higher management fee could impact its market share over time, other factors may currently outweigh its impact. Investors who bought the fund before its ETF listing are now profiting by over 100% upon selling the product and are transitioning to other options, according to Falcon X.

Despite significant turnover, even a small portion of the vast number of GBTC shares traded before the ETF launch selling after the event would create meaningful selling pressure.

Although GBTC’s sell-off may pose a threat to Bitcoin’s price trajectory, FalconX believes this selling pressure is likely to diminish quickly, as indicated by recent trends in the past few days.

Moreover, recent data from Apollo shows that GBTC still holds a substantial amount of BTC, with 461,983 BTC, highlighting its continued significance in the market compared to other major players like BlackRock, Fidelity, Ark/21 Shares, and Bitwise.

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