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Grayscale’s Bitcoin Trust “Halving” Precedes Actual BTC Halving: Coincidence or Something More?

Grayscale Investments, one of the prominent investors in Bitcoin, has witnessed a 50% reduction in its spot BTC ETFs just a few days before the much-awaited Bitcoin halving event. 

 

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As per the report, Grayscale Bitcoin Trust ETF BTC holdings were reduced by 50%, declining from 619,220 BTC on the first day of trading on January 11. According to GBTC data, the spot Bitcoin ETF held 309,871 BTC on its 66th day of trading, marking a 50% decrease from the initial trading debut. Currently, this amount is valued at $19.7 billion. 

The GBTC “halving” occurred just two days before the Bitcoin halving event, which will take off 50% of the mining reward from 6.25 BTC to 3.125 BTC. 

Moreover, GBTC has witnessed a substantial sell-off, exerting a massive influence on the Bitcoin price

This trend of outflows has been linked to the high trading fees associated with GBTC, which leads the chart on the highest fees among the 10 spot Bitcoin ETFs in the US starting at 1.5% since the trading launch. In response to increasing competition, most Bitcoin ETFs have been reducing their fees, setting trading commissions between 0.2% to 0.4%

BlackRock’s iShares Bitcoin Trust (IBIT), GBTC’s main competitor, initiated trading with a fee of 0.25% alongside a 0.12% discount for the first $5 billion of traded assets during the waiver period. 

BlackRock’s spot Bitcoin ETF has witnessed massive inflows, with holdings skyrocketing by over 10,000% from a mere 2,621 BTC on its trading debut to 272,548 BTC as of yesterday. At this stage, BlackRock’s IBIT is approximately 13% away from matching GBTC’s holdings. 

However, despite its rapid growth, IBIT has been unable to absorb the outflows from GBTC, which amounted to 309,349 BTC. Along with eight other issuers, spot Bitcoin ETF providers have amassed approximately 224, 552 BTC since the trading launch excluding GBTC. 

As of yesterday, April 16, the 10 spot Bitcoin ETFs collectively hold around 862,162 BTC, valued at $51.7 billion.

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Sophia Cruz
Financial Writer - Asian & European Desks
Sophia is an experienced writer, reporter and newsdesk member, mostly on the financial sectors. For the past 5 years Sophia has covered a wide variety of topics such as the financial markets, economics, technology, fin-tech and trading. Sophia has been a part of the FX Leaders team since 2017 and works on producing valuable content and information for traders of all levels of experience.
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