Yonsei_dent2024-02-06

"Capital Outflows from GBTC Will Likely Continue"

The recent correction and sideways movement of BTC may have been influenced, in part, by capital outflows from GBTC. The premium, which represents the relative value of GBTC to BTC, had been in negative value for a while. However, the discount gradually decreased after the second half of 2023. The reduction in the GBTC discount implies an increase in demand for GBTC as more cases of BTC to GBTC exchanges occurred. In other words, arbitrage activities aimed at exploiting the high discount became more active, ultimately leading to a decrease in the discount. The recently improved premium, which has turned positive, has been hovering around ±2% since mid-January. Currently, GBTC is showing a premium of -0.7%. Despite significant trading volume🟨, the fact that it remains negative suggests the presence of strong selling sentiment, especially when considering the rapid reduction in holdings🔴. With an operating fee of approximately 1.5%, GBTC's fees are relatively high compared to other ETFs. Unless there are changes to the fee structure, it appears that GBTC outflows will continue.