Inflows into Fidelity Overpower Grayscale's Bitcoin Outflows

By: Eliza Bennet

Grayscale, a notable Bitcoin fund manager, witnessed a slowdown in Bitcoin outflows, with $200 million withdrawn on January 29. While grayscale's outflows were notably low, inflows continued at an accelerated pace into the other funds such as Fidelity's Wise Origin Bitcoin Fund and BlackRock's IBIT fund. Leading the pack, the Fidelity Wise Origin Bitcoin Fund recorded the highest single-day inflow at $208 million.

This coincides with the robust trading activities that resulted in a net inflow of $255.6 million during the twelfth trading day. Yet, despite its recent outflows, Grayscale’s GBTC maintains its position as the top cryptocurrency ETF in liquidity. It recorded a trading volume of $570 million on the same day, thereby surpassing BlackRock’s IBIT by $110 million, as confirmed by Bloomberg Intelligence analyst James Seyffart.

Analysts suggest that the recent outflows in Grayscale may be due to profit-taking maneuvers by investors previously exposed to its net asset value discount. Additionally, the fund's 1.5% management fee may have prompted investors to shift towards Bitcoin ETFs providers such as BlackRock and Fidelity which charge a lower fee of 0.25%. As a result of the outflows, Grayscale’s ETF’s Assets Under Management (AUM) dropped from its year-to-date high of $29 billion to about $21.431 billion.

Despite recent trends, blockchain analysts predict a decrease in the fund manager's transfers of BTC to Coinbase following the slowdown in outflows, subsequently resulting in an increase in the price of Bitcoin.