Arkham Intelligence Predicts Grayscale’s GBTC to Run Out of Bitcoin in 96 Days

Sujha Sundararajan
Last updated: | 1 min read
Arkham Predicts Grayscale's GBTC to Run Out of BTC in 96 Days

Blockchain analytics company Arkham predicts that crypto investment firm Grayscale’s GBTC product will run-out of all its Bitcoin holdings in 96 days, at the current rate of redemptions.

“Since GBTC started trading as an ETF on 11th January, Grayscale has transferred 266.47K BTC out of their wallets for GBTC redemptions.” The rate of redemption equals to 25.9K BTC per week, the report added.

At the start of the year, Grayscale possessed 618.28K BTC for their Bitcoin Trust GBTC. “They now hold only 356.44K BTC,” Arkham estimates.

“If they carry on like this, there’s only 14 weeks until they run out for good.”

Grayscale, the world’s largest crypto asset manager, experienced a significant decrease in its Bitcoin holdings since converting its bitcoin fund into an exchange-traded fund (ETF) in mid-January.

BitMEX data showed that GBTC saw its 36th consecutive day of outflows on March 4. Cryptonews reported early this month that since GBTC’s conversion to an ETF, the total outflow has reached a staggering $9.26 billion.

This is mainly because Grayscale introduced a new feature at the time of the launch of its spot Bitcoin ETF. The feature enables investors to redeem their shares for Bitcoin, which was not possible previously.

Furthermore, GBTC has higher fees compared to the ETFs of Blackrock’s and Fidelity’s, thus contributing to the outflow.

This resulted in the company filing for ‘mini’ BTC ETF to stop the excessive outflows. The mini trust is mainly to compensate for losses to existing GBTC holders, investors, the company noted.

Theories Linked to GBTC’s Bleed

According to Bloomberg ETF analyst Eric Balchuna, the worst could be over for GBTC, but not.

He noted that the uptick in outflows is more likely related to the recent bankruptcies because of the size and consistency.

“The flows in Feb showed what retail outflows look like, smaller and random pattern,” he added. “The worst is probably close to being over. Once it is, only retail will be left and flows should look more like the Feb trickle.”