Analyst: Grayscale Bitcoin Trust sellout has clear reasons

By Adrian Zmudzinski
January 19, 2024 at 2:17 pm
Edited by Brian Stone
NEWS

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A crypto trader shared why he believes Grayscale Bitcoin Trust is seeing a mass sellout.
Grayscale Bitcoin Trust (GBTC) has been observed selling off its Bitcoin (BTC) holdings, with recent reports indicating that the firm recently moved $1.3 billion of Bitcoin to Coinbase. Pseudonymous crypto trader Ash Crypto explained that he believes that market forces are the sole reason behind this liquidation in a Jan. 18 X post.
Historically, GBTC has been a significant holder of Bitcoin. This accumulation was primarily due to their practice of redeeming shares by paying investors in USD rather than selling off the underlying BTC. This approach changed following the approval of Bitcoin spot exchange-traded funds (ETFs).
According to Ash Crypto, two primary drivers exist for investors pulling their funds from GBTC. Firstly, Grayscale charges a 1.5% annual management fee, significantly higher than what ETF issuers charge. This fee disparity has made other ETFs more attractive to investors.