Grayscale Bitcoin Trust continues to experience outflows following its transition to a closed-end fund. This move was prompted by the approval of Spot Bitcoin ETF applications earlier this year. With ongoing outflows, concerns arise within the community regarding the depletion of Bitcoin reserves held by GBTC.

Based on the current rate of outflows, it is projected that Grayscale will deplete its Bitcoin holdings by July 8, 2024, with an average daily outflow of 5,093 BTC. To date, total outflows have reached $15 billion. At the beginning of the year, GBTC held 618,000 BTC, but as of the latest observation, this figure has decreased to 328,012 BTC, equivalent to roughly $22.6 billion.

However, analysts believe that the actual depletion date may be delayed due to the significant slowdown in outflows. Additionally, Grayscale is reportedly working on launching a mini Bitcoin ETF, pending regulatory approval. This product is expected to offer reduced fees for traders, enhancing its competitiveness in the market.

Time is of the essence, according to John Sohn from Strategas Securities, as delays in the approval of the mini Bitcoin ETF allow competitors like BlackRock to accumulate significant inflows in their iShares Bitcoin Trust (IBIT). Outflows from GBTC are attributed to high fees, prompting investors to seek more cost-effective alternatives like the upcoming mini Bitcoin ETF.

Grayscale's involvement with platforms like FTX and Genesis also contributes to the challenges faced by GBTC, as these associations may conflict with its future objectives.

Nevertheless, Grayscale is anticipated to remain viable in the market with a certain level of inflows. Analysts suggest that a fee of 1.5% could still generate decent revenue for the company. Additionally, Grayscale is expected to benefit from the upcoming Halving event, which could potentially boost Bitcoin's value.

As of the time of writing, the price of a single Bitcoin stands at $66,947.21, representing a 1.14% increase in the last 24 hours and a 4.20% decrease in the previous 7 days. Some analysts caution that while the Halving event may mitigate declines, it may not drive prices upward as significantly as in the past.