Grayscale’s spot Bitcoin ETF experienced significant outflows leading up to the halving event, a code change that occurs every four years to maintain BTC scarcity. According to data from SoSoValue, there were $89.9 million in Grayscale exits, resulting in total net outflows of $1.6 billion for GBTC since January.

Among all 10 spot Bitcoin ETFs, cumulative outflows totaled $4.3 million. Fidelity and BlackRock saw increased demand, with Fidelity’s FBTC net inflows reaching $37.3 million and BlackRock’s IBIT at $18.7 million. On April 18, BlackRock was surpassed by a competitor for inflows in the spot BTC ETF market.

While GBTC was once the largest spot Bitcoin ETF, it has lost market share to new players like BlackRock. GBTC’s assets under management (AUM) have declined by around 50% in four months, dropping to less than $20 billion, while BlackRock commands over $17 billion in investor demand.

Experts attribute the significant GBTC exits to ongoing bankruptcy proceedings like FTX and Genesis, as well as Grayscale’s high fund fee of 1.5%. In response, Grayscale CEO Michael Sonnenshein plans to reduce GBTC fees gradually and has proposed a Bitcoin Mini Trust ETF with lower fees to attract market demand.

Looking ahead, Grayscale is anticipating SEC approval for spot Ether ETFs by May.

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