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Grayscale’s Bitcoin ETF Market Share Dips Below 50% Amid Rising Competition and Outflows

Grayscale‘s spot Bitcoin ETF, a pioneering financial product in the U.S. since its inception on January 11, has experienced a significant market share drop, marking the first time it has fallen below 50%.

According to Dune Analytics, as of March 12, the Grayscale Bitcoin Trust (GBTC) managed $28.5 billion, constituting 48.9% of the combined $56.7 billion in assets under management (AUM) across ten U.S. Bitcoin ETFs.

Initially, Grayscale dominated the market, with its fund representing approximately 99.5% of the total AUM of the first ten U.S. spot Bitcoin ETFs.

However, the landscape has shifted dramatically due to persistent daily withdrawals from GBTC, which averaged $329 million per day in the preceding week.

These outflows, particularly pronounced in the initial month post-launch, with $7 billion exiting the fund, have gradually decelerated.

Yet, a mid-February court decision enabling crypto lender Genesis to sell off approximately $1.3 billion in GBTC shares reignited the outflow trend. To date, GBTC has seen over $11 billion in outflows, as reported by Farside Bitcoin ETF flow data.

READ MORE: Grayscale Proposes New Bitcoin Mini Trust to Offer Tax-Efficient Investment Option

Grayscale’s fund transitioned from a trust to an ETF following a successful legal battle with the Securities and Exchange Commission (SEC) and subsequent approvals of other spot Bitcoin ETF applications.

This transformation allowed institutional investors engaged in GBTC arbitrage to permanently withdraw or reallocate their capital to other Bitcoin ETFs offering lower fees.

The market initially reacted negatively to GBTC’s outflows. However, optimism has been renewed by significant net inflows into other ETFs, such as BlackRock’s iShares Bitcoin ETF (IBIT) and the Fidelity Wise Origin Bitcoin Fund (FBTC), which have collectively attracted $16.9 billion in inflows since their launch.

Market analysts attribute the substantial inflows into these new ETFs as a key factor behind the recent surge in Bitcoin’s price, which hit a record high of $72,900 on March 11.

BlackRock’s ETF now holds over 200,000 BTC, valued at roughly $14.3 billion, underscoring the shifting dynamics within the cryptocurrency investment landscape.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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