Grayscale’s GBTC Sees a Significant Decrease in Bitcoin Holdings Amid Growing Bitcoin ETF Competition

Grayscale's exchange-traded fund, GBTC, has reported a decrease in its bitcoin holdings. Prior to Wednesday's market opening, GBTC held 605,890.87 bitcoin. However, the latest update reveals a reduction of 13,793.09 bitcoin, equivalent to approximately $571 million.

Major Outflows Impact Grayscale's GBTC

Following our previous coverage of GBTC's reductions on Wednesday, the fund's assets have experienced another decline. Data from Jan. 14, 2024, shows that Grayscale's Bitcoin Trust initially held a total of 617,079 BTC. Within just four days, a substantial outflow of 24,981.22 BTC has occurred. This represents a removal of over $1 billion in value from the fund's bitcoin holdings.

As of 2:38 p.m. Eastern Time (ET) on Thursday, GBTC's holdings stand at approximately 592,097.78 BTC. Based on prevailing exchange rates, the estimated value of the fund's BTC cache is around $24.5 billion. GBTC previously held a market advantage when it was traded over-the-counter (OTC) and before it recorded a discount to net asset value (NAV). In 2019, it witnessed a significant premium.

However, since becoming a discount in February 2021, the discount to NAV has widened. This trend continued until the fund was converted into a publicly accessible spot bitcoin ETF. While the market may be affected by these sales, several newly approved spot bitcoin ETFs are accumulating BTC reserves. Blackrock's IBIT now holds 25,067 BTC, and the Fidelity Wise Origin Bitcoin Fund (FBTC) holds 20,507 BTC.

Bitwise's BITB, with 8,309 BTC, ranks as the third-largest bitcoin ETF (excluding GBTC) in terms of BTC reserves. Ran Neuner, the founder of Crypto Banter, recently shared insights about the GBTC outflows on the social media platform X. "The GBTC overhang will persist for a while. I don't see any way that the other ETFs can absorb it," Neuner remarked. "If Blackrock had significant immediate buyers, they would already be in. I suspect and have been warning that we are due for a correction, and we may be midway through it. My first downside target is $39,600 to close the CME gap," he added.

JPMorgan market strategists, led by Nikolaos Panigirtzoglou, stated in a note to investors on Thursday that an additional $1.5 billion might still leave the bitcoin ETF market through GBTC profit-taking. This scenario could exert "further pressure on bitcoin prices over the coming weeks," Panigirtzoglou wrote. Analysts had previously projected a decrease of $3 billion in GBTC's value, and approximately half of this anticipated reduction has already materialized. As of 4:11 p.m. (ET) on Thursday, BTC was trading at $40,838 per unit, after hitting a 24-hour low of $40,600 at 3:00 p.m. during the afternoon trading sessions.

What are your thoughts on the GBTC outflows since the exchange-traded fund began trading publicly last week? Share your opinions and insights in the comments section below.

Frequently Asked Questions

What are the fees associated with an IRA for gold?

Six dollars per month is the fee for an Individual Retirement Account (IRA). This fee covers account maintenance fees, as well any investment costs that may be associated with your investments.

If you want to diversify, you may be required to pay extra fees. These fees vary depending on what type of IRA you choose. Some companies offer checking accounts for free, while others charge monthly fees for IRA account.

A majority of providers also charge annual administration fees. These fees range from 0% to 1%. The average rate per year is.25%. However, these rates are typically waived if you use a broker like TD Ameritrade.

How much should precious metals be included in your portfolio?

To answer this question we need to first define precious metals. Precious Metals are elements that have a very high relative value to other commodities. This makes them extremely valuable for trading and investing. Gold is by far the most common precious metal traded today.

There are many other precious metals, such as silver and platinum. The price for gold is subject to fluctuations, but stays relatively stable in times of economic turmoil. It is also not affected by inflation and depression.

In general, all precious metals have a tendency to go up with the market. However, the prices of precious metals do not always move in sync with one another. If the economy is struggling, the gold price tends to rise, while the prices for other precious metals tends to fall. This is because investors expect lower interest rates, making bonds less attractive investments.

In contrast, when the economy is strong, the opposite effect occurs. Investors are more inclined to invest in safe assets, such as Treasury Bonds, and they will not demand precious metals. They are more rare, so they become more expensive and less valuable.

You must therefore diversify your investments in precious metals to reap the maximum profits. Furthermore, because the price of precious Metals fluctuates, it is best not to focus on just one type of precious Metals.

Should You Open a Precious Metal IRA?

It is essential to be aware of the fact that precious metals do not have insurance coverage before opening an IRA. If you lose money in your investment, nothing can be done to recover it. This includes all investments that are lost to theft, fire, flood, or other causes.

You can protect yourself against such losses by purchasing physical gold and silver coins. These items have been around for thousands of years and represent real value that cannot be lost. If you were to sell them today, you would likely receive more than what you paid for them when they were first minted.

If you decide to open an IRA account, choose a reputable company that offers competitive rates and products. You should also consider using a third party custodian to protect your assets and give you access at any time.

When you open an account, keep in mind that you won't receive any returns until your retirement. Don't forget the future!

How is gold taxed within a Roth IRA

Investment accounts are subject to tax based only on their current value and not the amount you originally paid. If you invest $1,000 into a mutual fund, stock, or other investment account, then any gains are subjected tax.

However, if the money is deposited into a traditional IRA/401(k), the tax on the withdrawal of the money is not applicable. Dividends and capital gains are exempt from tax. Capital gains only apply to investments more than one years old.

The rules governing these accounts vary by state. For example, in Maryland, you must take withdrawals within 60 days after reaching age 59 1/2 . Massachusetts allows you to wait until April 1. New York has a maximum age limit of 70 1/2. You should plan and take distributions early enough to cover all retirement savings expenses to avoid penalties.

Are You Ready to Invest in Gold?

The answer will depend on how many dollars you have saved so far and whether you had gold as an investment option at the time. If you're unsure about which option to choose then consider investing in both.

In addition to being a safe investment, gold also offers potential returns. Retirees will find it an attractive investment.

Gold is more volatile than most other investments. Its value fluctuates over time.

However, it doesn't necessarily mean that you shouldn't invest your money in gold. This just means you need to account for fluctuations in your overall portfolio.

Another advantage to gold is that it can be used as a tangible asset. Gold can be stored more easily than stocks and bonds. It can also be transported.

Your gold will always be accessible as long you keep it in a safe place. You don't have to pay storage fees for physical gold.

Investing in gold can help protect against inflation. It's a great way to hedge against rising prices, as gold prices tend to increase along with other commodities.

Also, you'll reap the benefits of having some savings invested in something with a stable value. Gold tends to rise when the stock markets fall.

Investing in gold has another advantage: you can sell it anytime you want. You can easily liquidate your investment, just as with stocks. It doesn't matter if you are retiring.

If you do decide to invest in gold, make sure to diversify your holdings. You shouldn't try to put all of your eggs into one basket.

Don't purchase too much at once. Start small, buying only a few ounces. Then add more as needed.

Remember, the goal here isn't to get rich quickly. It's not to get rich quickly, but to accumulate enough wealth to no longer need Social Security benefits.

Although gold might not be the right investment for everyone it could make a great addition in any retirement plan.


  • Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (
  • You can only purchase gold bars at least 99.5% purity. (
  • (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (
  • This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (
  • Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (

External Links

How To

Gold IRAs are a growing trend

As investors seek to diversify their portfolios while protecting themselves from inflation, the trend towards gold IRAs is on the rise.

Owners can invest in gold bars and bullion with the gold IRA. This IRA can be used to grow your wealth tax-free and is an alternative option to stocks and bonds.

Investors can have confidence in their investments and avoid market volatility with a gold IRA. The gold IRA can be used to protect against inflation or other potential problems.

Investors also enjoy the benefits of owning physical gold, which includes its unique properties such as durability, portability, and divisibility.

Additional benefits of the gold IRA include the ability to quickly pass ownership to heirs. Additionally, the IRS does not consider gold a money or a commodity.

Investors who seek financial stability and a safe haven are finding the gold IRA increasingly attractive.

By: Jamie Redman
Title: Grayscale's GBTC Sees a Significant Decrease in Bitcoin Holdings Amid Growing Bitcoin ETF Competition
Sourced From:
Published Date: Thu, 18 Jan 2024 21:44:17 +0000

Recent Posts
Latest Featured Posts
Latest News Posts