Grayscale GBTC Outflows Hit $280M, Assets Fall Below $20B

Grayscale digital currency investment vehicles, particularly its Ethereum and Bitcoin exchange-traded funds (ETFs), have faced a substantial reduction in their asset base.

Grayscale, the world’s largest digital currency investment vehicle, has seen its asset base shrink below the $20 billion mark as outflows from its cryptocurrency exchange-traded funds (ETFs) continue.

According to data from SoSoValue, Grayscale Bitcoin Trust (GBTC) experienced an outflow of $280 million in the past week, with $52.9 million being withdrawn on Friday alone. This contributed to a sharp decline in the fund’s overall asset value.

In total, outflows from Bitcoin ETFs over the past week amounted to $706 million, further depleting Grayscale’s coffers.

Meanwhile, data from Arkham showed that the crypto asset manager’s total holdings had fallen below the $20 billion threshold. This downturn in asset value reflects a broader trend of decreasing enthusiasm for Bitcoin ETFs amid the ongoing crypto market crash.

Among Grayscale’s funds, GBTC has faced particular challenges in maintaining its asset base despite being the first mover in the exchange-traded funds space.

Elsewhere, Grayscale Ethereum Trust (ETHE) also experienced outflows, with $10.7 million being withdrawn from the fund on September 6. This made ETHE the only Ethereum ETF to experience outflows on the day.

While the ETHE had experienced some inflows earlier in the year, the recent trend has been predominantly negative.

These outflows come at a time when Ethereum itself has faced market challenges, including price volatility and competition from other blockchain networks. These factors have influenced investor sentiment, leading to decreased deposits and increased redemptions.

As the crypto asset manager ETFs face these financial pressures, the overall market for crypto funds is showing signs of contracting. This period of market correction is affecting not just Grayscale but other exchange-traded funds providers as well.

According to market analysts, this downturn may lead to a consolidation phase in the cryptocurrency investment product market.

Despite these significant outflows, on-chain data is supporting a potential reversal in markets. For instance, after the Friday’s weak Jobs data led to Bitcoin price crash and $300 million in liquidations, data has signaled at a potential price correction.

At the same time, ETH price is showing potential for a crash following $45M ETH selloff and weak US jobs data as reported by CoinGape. BTC price was trading at $54,781 at press time while Ethereum price was $2,305.

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