Earlier than being uplisted to an ETF from a belief, GBTC was considered one of one of many solely methods for inventory merchants within the U.S. to realize publicity to the worth actions of bitcoin with out the necessity to buy the precise cryptocurrency. That made it the most important regulated bitcoin fund on the earth by AUM.
The financial institution had beforehand estimated that as much as $3 billion had been invested in GBTC within the secondary market throughout 2023 to use the belief’s low cost to NAV. If this estimate is right, and on condition that $1.5 billion has already exited, there might be an extra $1.5 billion to exit the area by way of profit-taking on GBTC, which is able to put additional strain on bitcoin costs within the coming weeks.
These outflows are additionally placing strain on GBTC to decrease its charges, the report stated, including that the “GBTC payment at 1.5% nonetheless appears too excessive in comparison with different spot bitcoin ETFs risking additional outflows.”
“Much more capital, maybe an extra $5 billion-$10 billion, might exit GBTC if it loses its liquidity benefit,” the financial institution cautioned. As of Friday, GBTC is the most costly ETF amongst counterparts, with some charging zero charges for the primary six months or till a sure property beneath administration (AUM) goal is reached.
