According to Cointelegraph: An estimated $1.1 billion has poured out of Grayscale’s spot Bitcoin exchange-traded fund (ETF) over the last three trading days. This development comes as investors rush to exit the fund, reacting to its discount, which has now shrunk to its smallest size in almost three years.
According to James Seyffart, a Bloomberg ETF analyst, the third trading day alone, January 16, saw an outflow of about $594 million. Seyffart did note incoming flows into other recently launched Bitcoin ETFs, but expressed uncertainty as to whether these could balance out the outflow from the Grayscale Bitcoin Trust (GBTC).
Previously, GBTC investors profited by borrowing to enter the fund and then scalping gains from the Grayscale premium, which had hit a peak of 43% in July 2019. However, the abrupt shift of the premium to a discount in February 2021 obliterated the GBTC arbitrage trade. This led to many investors being caught in the fund due to a minimum six-month lock-up period on GBTC share purchases. Nonetheless, with GBTC's evolution into a spot ETF, the discount dropped to as low as 1.55%, prompting the recent mass exit by long-term investors.
Notably, the ten spot Bitcoin ETF issuers hold a total of 35,761 Bitcoin, excluding Grayscale’s 605,891 Bitcoin. BlackRock and Fidelity command holdings of 11,439 and 9,750 Bitcoin respectively. Furthermore, ARK Invest under Cathie Wood has started accumulating Bitcoin via the recently approved ARK 21Shares Bitcoin ETF (ARKB), making it the fifth-largest Bitcoin stack among the spot Bitcoin ETF issuers.