The history of Grayscale’s GBTC discount and outflow recovery

The massive drain on liquidity

The $643 million single-day outflow recorded on a Monday marked the largest withdrawal from the Grayscale Bitcoin Trust (GBTC) since its conversion to a spot ETF on January 11, 2024. This liquidity drain followed a period where the fund saw billions of dollars exit as investors moved to lower-cost alternatives. In January 2024 alone, the fund saw massive outflows totaling $5.64 billion. Before the transition to an ETF, the trust operated as a closed-end vehicle with a 2.0% expense ratio. This structure often caused the price to deviate from the net asset value (NAV) of its underlying Bitcoin holdings. Since the conversion, the fund has seen $7.4 billion in total outflows. The product held 619,220 BTC at the time of its conversion.

The competition in the Bitcoin ETF market creates constant pressure on Grayscale because when the first group of spot Bitcoin ETFs launched in January 2024, many providers like Franklin Templeton and Bitwise Asset Management waived fees for several months. For example, VanEck waived its fees entirely until March 2025. Grayscale, however, maintained its 1.5% fee. This higher cost helped drive the roughly $12 billion that left the fund since it converted. I see the massive gap between Grayscale’s costs and those of its competitors. The market response to the high fee was immediate and brutal.

Fee wars and the Mini Trust

Michael Sonnenshein, the CEO of Grayscale, argues that fees on such products naturally decrease as markets reach maturity. He suggests that products in the early stages of their lifecycle require higher fees to cover operational costs like Bitcoin custody and regulatory compliance. While he defends the 1.5% expense ratio, rival firms like BlackRock and Fidelity offer much lower rates. BlackRock’s iShares Bitcoin Trust (IBIT) carries a fee that is six times lower than GBTC. As of Tuesday, the BlackRock iShares Bitcoin Trust (IBIT) amassed $17.2 billion in assets.

To fight this loss of market share, Grayscale filed for a "mini" Bitcoin ETF. This proposed Grayscale Bitcoin Mini Trust would trade under the ticker BTC. The firm intends to seed this new fund with shares from GBTC. This structure allows existing holders to receive shares of the new Mini Trust pro rata. If this product receives regulatory approval, it will provide a materially lower fee than the flagship GBTC. You probably already know that these types of spinoffs help reduce the total cost for long-term holders. I believe this move comes too late to prevent the massive migration of assets to competitors like BlackRock, which has seen its IBIT fund amass billions.

Price volatility and asset shifts

The price of GBTC shows significant volatility across the years. In August 2023, the adjusted price was $16.90. By January 2024, it reached $34.32, and it surged to $80.41 by January 2025. In the first half of 2026, the price fluctuated between $45.52 in June and $65.37 in January. During the recent weeks of October 2026, the price levels stayed within a specific range. On October 1, 2026, the close price hit $65.44. By October 19, 2026, the close price settled at $63.26.

The fund’s Bitcoin holdings have declined as outflows continued. At the start of 2026, GBTC held over 618,000 BTC. By March 12, 2026, the holdings fell to approximately 156,279 BTC, which represents a massive reduction in the assets managed by the fund. Even with these losses, the fund still manages over $11 billion in assets, and Grayscale’s website shows the fund holds just over 318,451 BTC. On March 18, 2026, the fund saw a $642.5 million outflow as the price of Bitcoin fell to $65,875. This occurred after the price hit a recent peak of $73,797 on March 14. The withdrawal contributed to a net decrease of $154.3 million across all spot Bitcoin ETFs.

The NAV discount verdict

The relationship between the share price and the net asset value remains a focus for traders. In mid-September 2026, the discount to NAV fluctuated between -0.05% and 0.08%. On September 17, 2026, the discount stood at -0.05%. By September 23, 2026, the value showed a 0.00% difference. In October 2026, the discount stayed near zero, hitting -0.03% on October 2 and 0.00% on October 16. Does the introduction of a lower-cost "mini" version actually stem the tide of capital moving to competitors?

On a Friday in March, withdrawals from GBTC amounted to just $44.2 million. This was a sharp contrast to the $640 million withdrawal on January 22. I find the fee structure of GBTC to be its biggest failure. While the fund has historical significance, the 1.5% fee makes it an expensive choice compared to IBIT or other funds that offer 0.25% or lower. The outflows of $12 billion since conversion show that investors prioritize cost over brand name. Even as GBTC battles for relevance, IBIT has emerged as the leader in the category. I would not recommend GBTC to anyone seeking the most efficient way to hold Bitcoin.