Bitcoin experienced a significant selloff, with Grayscale’s Bitcoin Trust seeing record outflows as the asset losses accelerated since converting into an exchange-traded fund. On Monday, the ETF recorded a daily outflow of $642.5 million as bitcoin prices dropped by 4%. The trend continued on Tuesday, with the cryptocurrency decreasing by another 2% by mid-afternoon.
Investors have been exiting the Grayscale fund since its conversion into an ETF on January 10, while money has been flowing into the nine new spot bitcoin ETFs approved by the SEC on the same date. The total outflows from the Grayscale ETF have reached approximately $12 billion since conversion, although the 52% increase in bitcoin’s price has offset some of these losses. Despite the high fees associated with Grayscale’s fund, CEO Michael Sonnenshein announced plans to reduce fees over time.
Overall, most other bitcoin funds have seen minimal inflows or little change in assets, with the lack of fresh buying in combination with Grayscale outflows resulting in Monday being the lowest single day for bitcoin ETF flows since late January. Todd Rosenbluth, head of research at VettaFi, acknowledged that profit-taking and redemptions are expected after strong price increases, emphasizing the need for investors to take gains when necessary.