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BlackRock, ProShares Bitcoin ETFs Surpass GBTC Daily Trade

Key Takeaways
  • GBTC, leading spot Bitcoin ETF since January 11, lost dominance on February 1 to IBIT and BITO.
  • GBTC faced challenges with outflows and reduced daily trading volumes, shedding over $5.8 billion in assets since January 11.
  • GBTC's average BTC transfers to Coinbase sharply dropped from $700 million to below $300 million since January 26.
BlackRock, ProShares

GBTC Loses Dominance in Spot Bitcoin ETFs on Feb 1

The spot Bitcoin ETF market, which had been predominantly led by Grayscale's converted GBTC ETF since its inception on January 11, witnessed a shift in dominance on February 1. 

BlackRock's iShares Bitcoin Trust (IBIT) and ProShares' Bitcoin Strategy ETF (BITO) emerged as the frontrunners among the nine ETFs, surpassing GBTC in daily trading volumes.

IBIT took the lead with $301 million in volume, while BITO closely followed with $298 million in trades. GBTC secured the third position with $292 million in daily trading volume.

GBTC's Shift in Dominance and Substantial Asset Outflows

Spot Bitcoin ETF dynamics have undergone a significant transformation as Grayscale's GBTC, which initially dominated the market, faced a shift in fortunes. This change is attributed to substantial outflows from the trust since its inception, beginning on January 11.

Investors' newfound ability to redeem their investments after the product's conversion to spot ETF played a pivotal role in diminishing GBTC's stronghold. This redemption feature was not available to investors previously.

Moreover, Grayscale's GBTC has experienced considerable asset erosion, shedding over $5.8 billion in value since January 11. The trust's higher fees have been a contributing factor to this significant outflow.

In contrast, the collective inflows for the nine emerging ETFs during the same period have reached $7.2 billion, further highlighting the shifting dynamics within the spot Bitcoin ETF market.

GBTC Outflows and Potential Impact on BTC Prices

Recent days have witnessed a notable decline in the dominance of GBTC, marked by a shift in its transaction patterns. In earlier times, GBTC consistently transferred an average of $700 million worth of BTC to the Coinbase crypto exchange, but now the total amount has fallen below $300 million since January 26.

Coin Gabbar suggests that the outflows from GBTC, primarily attributed to profit-taking, are now a phenomenon of the past. This development could potentially alleviate the pressure on BTC's price, signaling a shift in market dynamics.

It is noteworthy that during the peak of GBTC selling, the FTX crypto exchange made a significant move by divesting its entire GBTC shareholding. This amounted to 22 million GBTC shares, valued at approximately $1 billion, adding another layer to the evolving landscape of GBTC's market position.

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