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Grayscale Bitcoin Trust ETF Sees $671M Outflow on January 26 Amid Market Volatility

The Grayscale Bitcoin Trust ETF (NYSE Arca: GBTC), the world’s largest Bitcoin ETF, experienced its largest single-day net outflow of US$671 million on January 26, according to data from Alpha SOSO Value. The fund also had a turnover of US$656 million, indicating high trading activity amid the recent market volatility.

The GBTC, which was launched in 2013 as a private placement and converted to a spot Bitcoin ETF in 2024, gives investors exposure to Bitcoin without needing to set up an account or wallet on a cryptocurrency exchange. The fund charges a 1.5% annual fee, which is higher than its competitors, but has a significant advantage in terms of assets under management (AUM).

Source: Alpha SOSO Value

However, the GBTC has faced increasing competition from other Bitcoin ETFs that have been approved by the Securities and Exchange Commission (SEC) in the past year. Some of these ETFs offer lower fees, better tracking of the Bitcoin price, and more liquidity options for investors. As a result, the GBTC has seen its cumulative net outflows reach US$5.46 billion, while its AUM has dropped to US$19.99 billion as of January 26.

The GBTC’s performance has also been affected by the fluctuations in the Bitcoin market, which has been under pressure from regulatory uncertainty, environmental concerns, and cyberattacks. Bitcoin, which reached an all-time high of over $69,000 in November 2021, has fallen below US$40,000 in January 2024, losing more than 30% of its value in a month.

Despite the challenges, the GBTC remains a popular choice for many investors who want to gain exposure to the leading cryptocurrency. The fund’s sponsor, Grayscale Investments, has been actively promoting the benefits of Bitcoin investing and expanding its product offerings to include other digital assets. The GBTC also has a loyal fan base of long-term holders who believe in the potential of Bitcoin as a store of value and a hedge against inflation.

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