Grayscale Bitcoin Trust witnesses significant outflows amid record-breaking BTC ETF trades

Grayscale Bitcoin Trust (GBTC), a prominent digital asset management firm, experienced another day of substantial outflows from its spot Bitcoin exchange-traded fund (ETF), with over $600 million exiting GBTC on February 29. This marks a total outflow of approximately $8.4 billion since the fund’s inception on January 11.

Outflows from Grayscale Bitcoin Trust

According to data from Farside Investors, Grayscale witnessed $600 million exiting GBTC on February 29 alone. This significant outflow underscores a growing trend of investors divesting from the trust. 

Despite Bitcoin’s recent price surge, Grayscale’s flagship trust has experienced persistent outflows, raising questions about investor sentiment toward the fund.

Conversely, several other Bitcoin ETFs recorded substantial inflows on the same day, indicating varying investor preferences within the digital asset space. Eight ETFs collectively added 14,934 BTC worth $940 million. 

Notably, iShares Bitcoin Trust (IBIT) by BlackRock, the world’s largest asset management firm, saw an addition of 10,140 BTC valued at $638 million, followed by Fidelity’s FBTC, which added 4,066 BTC worth $255.9 million.

Grayscale’s appeal to SEC for options approval

Grayscale Investments has appealed to the United States Securities and Exchange Commission (SEC) to approve options on its spot BTC ETF, citing the need to offer access to a broader range of investors. 

Grayscale CEO Michael Sonnenshein expressed concerns over potential discrimination against GBTC shareholders if the SEC rejected options on GBTC. Sonnenshein emphasized that the SEC had previously approved options on Bitcoin futures ETFs, highlighting the inconsistency in regulatory treatment.

Record-breaking BTC ETF trades

Spot BTC ETFs witnessed a remarkable surge in trading volume on Wednesday, with a staggering $7.69 billion traded, surpassing previous volume records by over one and a half times. This surge in trading activity reflects the growing interest and participation in Bitcoin ETFs as investors seek exposure to the leading cryptocurrency through regulated investment vehicles.

Bitcoin continues its upward trajectory, reaching a two-year high earlier this week. According to data from CoinMarketCap, BTC has surged by more than 19% in the past seven days, boasting a market capitalization of $1.2 trillion. This impressive performance reaffirms Bitcoin’s status as one of the most valuable assets globally, attracting attention from both institutional and retail investors.