The big debut of spot Bitcoin exchange-traded funds (ETFs) on U.S. stock exchanges has been followed by negative price action surrounding the underlying asset. 

A big reason for the decline has been the large volume of outflows from Grayscale Investments’ newly converted ETF – the Grayscale Bitcoin Trust (GBTC). 

Despite having a significant lead on its competitors in terms of assets under management (AUM), the crypto investment firm has held fees steady at 1.5%, making it the most expensive option for investors looking to gain exposure to BTC through an ETF.

GBTC has seen over $3.4 billion in outflows so far, with $515 million outflows recorded on Tuesday alone. On the other hand, inflows into BlackRock and Fidelity’s spot Bitcoin ETF have picked up, offsetting the net outflows from the segment in general.

Still, the result of investors pulling funds from GBTC means that Grayscale has sold the equivalent amount of BTC, which sometimes amounts to around 20,000 BTC per day.

Analysts at Glassnode described the event as a “classic sell-the-news” event in their latest newsletter, noting that Bitcoin had fallen 18% to a low of $39,500 since the ETFs began trading.

Despite the correction, analysts say that investors are looking ahead to find the next major narrative that will drive prices in the digital asset market.

“There are some indicators alluding to ETH outperformance, as well as interesting divergences in altcoin price action relative to the majors,” said the Glassnode analysts. 

Optimism around a potential Ethereum ETF has led to the second-largest cryptocurrency by market cap outperforming Bitcoin by 20% in recent weeks, marking its strongest performance since late 2022.

“Concurrently, the volume of net profits locked in by ETH investors has reached a new multi-year high. While profit taking has increased since mid-October, the peak on 13-Jan reached over $900M/day, aligned with investors capitalising on the ‘sell-the-news’ momentum,” said Glassnode.