Summary
The article discusses the potential impact of the Grayscale Bitcoin Trust (GBTC) on bitcoin prices. Before being uplisted to an ETF, GBTC was a popular way for US stock traders to gain exposure to bitcoin’s price movements. The bank estimates that up to $3 billion was invested in GBTC in the secondary market in 2023. With $1.5 billion already exited, there could be an additional $1.5 billion to exit as profit-taking on GBTC, which could further pressure bitcoin prices. The outflows are also pressuring GBTC to lower its fees, as its 1.5% fee is considered high compared to other spot bitcoin ETFs. The bank warns that if GBTC loses its liquidity advantage, an additional $5 billion to $10 billion could exit the fund. GBTC is currently the most expensive ETF among its counterparts.
Key Points
1. GBTC was one of the only ways for stock traders in the U.S. to gain exposure to bitcoin price movements without purchasing the actual cryptocurrency. This made it the largest regulated bitcoin fund in the world by AUM.
2. Up to $3 billion was invested in GBTC in the secondary market during 2023 to exploit the trust’s discount to NAV. With $1.5 billion already exited, there could be an additional $1.5 billion to exit the space via profit-taking on GBTC, putting further pressure on bitcoin prices.
3. The outflows from GBTC are also pressuring the fund to lower its fees. The report suggests that the current 1.5% fee is too high compared to other spot bitcoin ETFs, risking further outflows. If GBTC loses its liquidity advantage, the bank warns that an additional $5 billion to $10 billion could exit the fund.