Grayscale BTC Investment Products Continue To Erupt, ETF Bitcoin Spot Bersinar

JAKARTA - The world's largest bitcoin investment fund, the Grayscale Bitcoin Trust (GBTC), continues to experience a decline in its BTC reserves. In the last four days, GBTC has released more than 13,700 BTC, worth more than $1 billion, amid growing competition from other bitcoin investment products.

Additional information, GBTC is an investment fund that allows investors to participate in the bitcoin market without having to buy, store, or manage BTC directly. GBTC buys and stores large amounts of BTC, and sells its shares to investors at a price that reflects its BTC net asset value (NAV).

GBTC was once a major choice for institutional and retail investors who wanted to invest in bitcoin, as it was a product listed on the exchange, regulated, and easily accessible. GBTC also enjoys premiums, which is the difference between GBTC's share price and its NAV BTC, which reached more than 40% in 2019. This premium shows high demand and low availability for legitimate bitcoin investment products.

However, since February 2021, GBTC has turned into a discount, namely when the share price of GBTC is lower than its NAV BTC. This discount shows a decrease in interest and excess offering for bitcoin investment products. One of the factors affecting GBTC discounts is the emergence of new, more attractive bitcoin investment products, such as bitcoin exchange-traded funds (ETF), which offer lower costs, higher liquidity, and better transparency.

According to data from Bitcoin.com News, GBTC has experienced a decline in its BTC reserves since last Wednesday. On January 14, 2024, GBTC has a total of 617,079 BTC. However, on January 17, 2024, this number was reduced to 592,097.78 BTC, meaning that GBTC has released 24,981.22 BTC, or about $1 billion, in four days. On Thursday, January 18, 2024, at 14:38 East Time (ET), the BTC GBTC reserve value is estimated at around $24.5 billion.

Bitcoin ETF Competition Increases

While GBTC has decreased, several new bitcoin investment products have increased. In October 2021, the US Securities and Exchange Commission (SEC) approved several bitcoin ETFs that follow bitcoin prices in the spot market, such as IBIT Blackrock, FBTC Fidelity, and BITB Bitwise. This spot's bitcoin ETF is considered superior to GBTC, which follows bitcoin prices in the futures market, because it is more accurate, efficient, and cheap.

According to data from ETF.com, IBIT Blackrock now has 25,067 BTC, FBTC Fidelity has 20,507 BTC, and BITB Bitwise has 8,309 BTC. All three bitcoin ETFs have raised assets under management (AUM) of more than $1 billion each, and are attracting many investors from GBTC.

Ran Neuner, founder of Crypto Banter, said that the GBTC outflow is likely to continue, as other bitcoin ETFs cannot absorb them. "GBTC relics will last for a while. I don't see how other ETFs absorb them," he said on social media platform X. "If Blackrock had a big buyer soon, they would have come in. I suspect and have warned that we are indeed facing a correction and we may be in the middle. My first drop target was $39,600 to close the CME gap," he added.

The JPMorgan market strategy led by Nikolaos Panigirtzoglou also estimates that GBTC will experience a decline of a value of $3 billion due to investor profit taking. In a note sent to investors on Thursday, Panigirtzoglou said that an additional $1.5 billion might still leave the ETF bitcoin market through the sale of GBTC. This scenario could put "further emphasis on bitcoin prices in the coming weeks," he wrote.

On Thursday, January 18, 2024, at 16.11 (ET), the price of bitcoin fell to $40,838 per unit, after reaching a 24-hour low of $40,600 at 15.00. This decline was also influenced by other factors, such as inflation concerns, geopolitical tensions, and strict regulations.