Grayscale’s GBTC Sees Significant BTC Reduction Amid Bitcoin ETF Competition

Major Decrease in GBTC Holdings

Before the market opened on Wednesday, Grayscale's exchange-traded fund, GBTC, reported holding 605,890.87 bitcoin. However, the latest update from the company reveals a significant decrease in GBTC's holdings. A total of 13,793.09 bitcoin, valued at approximately $571 million, has been withdrawn from the fund.

This recent decline in reserves marks another significant BTC withdrawal from Grayscale's assets since our previous coverage. Data from Jan. 14, 2024, shows that Grayscale's Bitcoin Trust initially had 617,079 BTC. Within just four days, a staggering 24,981.22 BTC has been withdrawn from the fund, representing a removal of over $1 billion in value from the fund's bitcoin holdings.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, the GBTC holdings stand at around 592,097.78 BTC, with an estimated value of $24.5 billion. GBTC used to have an edge in the market when it was traded over-the-counter (OTC) and had a significant premium. However, it started trading at a discount to net asset value (NAV) in 2019 and continued to do so until it became a publicly accessible spot bitcoin ETF in February 2021.

While GBTC is experiencing sales pressure, several newly approved spot bitcoin ETFs are accumulating BTC reserves. Blackrock's IBIT currently holds 25,067 BTC, and the Fidelity Wise Origin Bitcoin Fund (FBTC) holds 20,507 BTC. Bitwise's BITB secures its position as the third-largest bitcoin ETF in terms of BTC reserves, with 8,309 BTC.

Renowned Crypto Banter founder Ran Neuner expressed his insights on the GBTC outflows. He mentioned that the GBTC overhang will continue for some time and expressed skepticism about other ETFs absorbing it. Neuner also warned about a potential correction in the market, with his first downside target being $39,600 to close the CME gap.

JPMorgan market strategists, led by Nikolaos Panigirtzoglou, highlighted in a note to investors that an additional $1.5 billion might leave the bitcoin ETF market through GBTC profit-taking. This could potentially exert further pressure on bitcoin prices in the coming weeks. Analysts had previously projected a decrease of $3 billion in GBTC's value, and approximately half of this expected reduction has already occurred.

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 during the afternoon trading sessions.

What are your thoughts on the GBTC outflows since the ETF started trading publicly? Share your opinions in the comments section below.

Frequently Asked Questions

Can I buy Gold with my Self-Directed IRA?

You can purchase gold with your self-directed IRA, but you must first open an account at a brokerage firm like TD Ameritrade. You can also transfer funds from an existing retirement fund.

The IRS allows individuals to contribute as high as $5,500 ($6,500 if they are married and jointly) to a traditional IRA. Individuals are allowed to contribute $1,000 each ($2,000 if married or filing jointly) to a Roth IRA.

If you do decide that you want to invest, it is a good idea to buy physical bullion and not in futures. Futures contracts are financial instruments based on the price of gold. These financial instruments allow you to speculate about future prices without actually owning the metal. But physical bullion refers to real gold and silver bars you can carry in your hand.

How Do You Make a Withdrawal from a Precious Metal IRA?

First decide if your IRA account allows you to withdraw funds. Make sure you have enough cash in your account to cover any fees, penalties, or charges that may be associated with withdrawing money from an IRA.

If you are willing to pay a penalty for early withdrawal, you should consider opening a taxable brokerage account instead of an IRA. This option will require you to pay taxes on the amount that you withdraw.

Next, you need to determine how much money is going to be taken out from your IRA. This calculation depends on several factors, including the age when you withdraw the money, how long you've owned the account, and whether you intend to continue contributing to your retirement plan.

Once you have an idea of the amount of your total savings you wish to convert into cash you will need to decide what type of IRA you want. Traditional IRAs permit you to withdraw your funds tax-free once you turn 59 1/2. Roth IRAs have income taxes upfront, but you can access the earnings later on without paying additional taxes.

After these calculations have been completed, you will need to open a brokerage bank account. To encourage customers to open accounts, brokers often offer signup bonuses and promotions. It is better to open an account with a debit than a creditcard in order to avoid any unnecessary fees.

When you do finally decide to withdraw from your precious metallic IRA, you will need a safe space where you can safely store your coins. Some storage facilities will accept bullion bars, others require you to buy individual coins. Either way, you'll need to weigh the pros and cons of each before choosing one.

Bullion bars are easier to store than individual coins. However, you'll need to count every coin individually. However, keeping individual coins in a separate place allows you to easily track their values.

Some prefer to keep their money in a vault. Others prefer to place them in safe deposit boxes. Whatever method you choose to store your bullion, you should ensure it is safe and secure so you can enjoy its many benefits for many years.

How is gold taxed in Roth IRA?

An investment account's tax is calculated based on the current value of the account, and not on what you paid originally. So if you invest $1,000 in a mutual fund or stock and then sell it later, any gains are subject to taxes.

But if you put the money into a traditional IRA or 401(k), there's no tax when you withdraw the money. Taxes are only charged on capital gains or dividends earned, which only apply to investments longer than one calendar year.

These rules vary from one state to another. Maryland is an example of this. You must withdraw your funds within 60 calendar days of turning 59 1/2. Massachusetts allows you to wait until April 1. New York allows you to wait until age 70 1/2. To avoid penalties, plan ahead so you can take distributions at the right time.

What precious metals can you invest in for retirement?

It is gold and silver that are the best precious metal investment. They are both easy to trade and have been around for years. Consider adding them to the list if you're looking to diversify and expand your portfolio.

Gold: One of the oldest forms of currency, gold, is one of mankind's most valuable. It is very stable and secure. Because of this, it's considered a good way to preserve wealth during times of uncertainty.

Silver: Silver has always been popular among investors. It is an excellent choice for investors who wish to avoid volatility. Silver tends instead to go up than down, which is unlike gold.

Platinium: Another form of precious metal is platinum, which is becoming more popular. It is very durable and resistant against corrosion, much like silver and gold. It's also more expensive than the other two.

Rhodium. Rhodium is used as a catalyst. It's also used in jewelry making. It is also quite affordable compared with other types of precious metals.

Palladium (or Palladium): Palladium can be compared to platinum, but is much more common. It's also much more affordable. It is a preferred choice among investors who are looking to add precious materials to their portfolios.

How does gold perform as an investment?

The supply and the demand for gold determine how much gold is worth. It is also affected by interest rates.

Due to the limited supply of gold, prices for gold are highly volatile. In addition, there is a risk associated with owning physical gold because you have to store it somewhere.


  • If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (
  • The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (
  • Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (
  • (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.) (
  • Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (

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How To

Gold IRAs: A Growing Trend

Investors are increasingly turning to gold IRAs as a way to diversify and protect their portfolios from inflation.

Gold IRA owners can now invest in physical gold bullion or bars. It can be used for tax-free growth and provides an alternative investment option for those concerned about stocks and bonds.

A gold IRA allows investors the freedom to manage their wealth without worrying about volatility in the markets. They can use the gold IRA to protect themselves against inflation and other potential problems.

Physical gold is also a great investment option, as it has unique properties like durability, portability, divisibility, and portability.

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 Significant BTC Reduction Amid Bitcoin ETF Competition
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Published Date: Thu, 18 Jan 2024 21:44:17 +0000

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