FTX selling $1 billion of Grayscale's bitcoin ETF has spurred major outflows from the fund since SEC approval, report says
Lauren DeCicca/Getty Images; Jenny Chang-Rodriguez/BI
- FTX sold 22 million shares from Grayscale's bitcoin fund, worth $900 million, Coindesk reported.
- That accounts for a large chunk of the $2 billion in outflows the fund saw after its conversion to an ETF.
- The exodus comes as Grayscale's ETF fees stand well above those of competitors.
The FTX bankruptcy estate is responsible for a massive portion of the outflows from Grayscale's bitcoin fund since its conversion to an ETF earlier this month, according to Coindesk.
The failed crypto firm sold 22 million shares of the Grayscale Bitcoin Trust, worth $900 million, zeroing out its holdings in the fund, CoinDesk reported, citing anonymous sources and related data.
This figure is part of a larger wave of outflows from GBTC, amounting to over $2 billion in shares sold since the investment vehicle became an exchange traded fund this month. Though Grayscale's was the first to start trading, it's seen higher outflows, which the report says can partly be attributed to the selling by FTX.
Prior to its conversion to an ETF on the approval from the Securities and Exchange Commission on January 11, the $27 billion trust was a closed-end fund.
Grayscale did not respond immediately to Business Insider's request for comment.
A fee war had been heating up even before the SEC gave the green light to the spot ETFs, with Grayscale's competitors in the space charging fees of 0.2%-0.9%. GBTC charges a 1.5% fee.
Although many hoped the ETFs' approval would boost bitcoin's price, the token has slumped alongside GBTC shares, with the two falling 13.69% and 12.68%, respectively, since January 11.
Prior to the SEC's approval, Standard Chartered said the ETFs could send the price of bitcoin to $200,000 by the end of 2025.
"This assumes that between 437,000 and 1.32mn new bitcoins will be held in spot US ETFs by end-2024," Head of FX Research Geoff Kendrick wrote, estimating that inflows this year alone could be $50 billion-$100 billion.