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Grayscale's GBTC has suffered massive outflows in recent weeks, ahead of the expected April 20 Bitcoin halving. Kostenlose Bilder mit KI/flickr

KEY POINTS

  • From more than 619K Bitcoin in January, GBTC now only holds some 309K Bitcoins
  • GBTC charges a 1.5% fee compared to BlackRock's IBIT fee of 0.12%
  • Bitcoin has plunged significantly from its all-time high of $73K last month

Cryptocurrency asset management giant Grayscale was one of the companies that saw its spot Bitcoin exchange-traded fund (ETF) approved in January, but three months since the Grayscale Bitcoin Trust (GBTC) was approved, its Bitcoin holdings have been reduced by more than half from when spot BTC trading kicked off.

The GBTC fund is down 50% since the U.S. Securities and Exchange Commission (SEC) approved it in Jan. 11. Its market share by BTC holdings has also plummeted 37% in the past three months.

The ETF held around 619,220 Bitcoin when spot Bitcoin trading kicked off as per The Block. However, its latest disclosures reveal that GBTC only holds 309,871 Bitcoin as of Tuesday.

News of the GBTC's holdings significant decline comes as Bitcoin is around three days shy of the much-anticipated halving, wherein rewards for BTC mining are cut in half, thus reducing the supply of new Bitcoins in the market.

The exact reason for GBTC's Bitcoin holdings decline is unclear, but The Block noted that Grayscale charges a much higher fee than other spot Bitcoin ETF issuers. For instance, BlackRock's IBIT charges a 0.12% fee, while GBTC charges 1.5%. Also, the trust was launched more than a decade ago but was re-branded into an ETF in January, unlike other spot Bitcoin ETFs that were started as a new offering.

Significant movement among Bitcoin owners ahead of the halving may also have affected the GBTC outflows. Bitcoin holders have notably been moving their stashes in recent days as the world's largest digital asset has also dramatically plunged from its $73,000 all-time high last month to around $63,000 on Tuesday.

While most Bitcoiners are looking forward to the halving due to the event historically pumping prices amid high demand and increased scarcity, some BTC owners are apparently fearful of the possible negative impact of the halving on Bitcoin prices.

Crypto analyst Samson Mow said aside from geopolitical factors such as the Middle East crisis that escalated over the weekend and market volatility, there is a lack of knowledge about what happens during Bitcoin halving, making some holders fearful of "what comes next."

Meanwhile, Grayscale was also spotted moving over $400 million worth of Bitcoin to Coinbase last week as the investment giant suffered consistent BTC outflows. Crypto users on X (formerly Twitter) immediately reacted to the move, with one saying it could be a sign of "panic."

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