Grayscale's Bitcoin Trust (GBTC) moved more than 19,000 bitcoin [BTC] from its publicly known wallet Wednesday morning. Since the spot bitcoin ETFs opened for business on Jan. 11, Grayscale has now moved nearly 113,000 bitcoin from its wallet, the overwhelming majority of which was to Coinbase Prime in preparation for sale, according to data compiled from Arkham.

The Grayscale website Wednesday morning showed GBTC as holding roughly 537,000 bitcoin, down about 100,000 BTC since Jan. 11.

As Arkham noted, one caveat to the observed movement of bitcoin out of the Grayscale wallet is that not all of that may be related to redemption. "The outflows are usually split between Coinbase Prime and new GBTC custody addresses," said Arkham. "This means that not all of the BTC moved is being redeemed. The outflows appear to be settlements of trading activity for the previous day(s)."

Due to the input-output structure of its blockchain, Bitcoin transaction outputs are often split amongst multiple addresses.

GBTC custody wallets frequently send to multiple addresses, most often a Coinbase Prime deposit and a fresh GBTC custody address. This means that some of… pic.twitter.com/Oml9IhLDMp
— Arkham (@ArkhamIntel) January 24, 2024

GBTC has seen this massive outflow for any number of reasons, but principally as Grayscale cut its management fee just 50 basis points to 1.50% following the conversion to a spot ETF. That's more than 100 basis points higher than the other nine competing bitcoin ETFs. Grayscale has now seen the departure of more than 10,000 bitcoin per day for several days running. The exit of bitcoin combined with the decline in the price of bitcoin has led to a fall in assets under management (AUM) by more than $1 billion each day this week.

The hopes of bitcoin bulls were momentarily buoyed earlier this week on a Monday CoinDesk report that the FTX estate had unloaded its 22 million share GBTC holding. With this non-economic whale seller out of the way, the bulls hoped there might be a slowdown in GBTC exits. To this point though, this hasn't happened, as evidenced by this morning's movement of 19,000 bitcoin to exchange.

Update (1/25/2024 14:50 UTC): Adds detail noting the decline in AUM is due a combination of reduced bitcoin in fund and lower prices. The original story didn't mention the lower bitcoin price as a contributing factor in the drop in AUM.

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Stephen Alpher

Stephen is CoinDesk's managing editor for Markets. He previously served as managing editor at Seeking Alpha. A native of suburban Washington, D.C., Stephen went to the University of Pennsylvania's Wharton School, majoring in finance. He holds BTC above CoinDesk’s disclosure threshold of $1,000.