The bankruptcy estate of collapsed crypto exchange FTX may be the cause of just under half of the heavy outflows from the Grayscale Bitcoin Trust (GBTC) since it converted to a spot Bitcoin exchange-traded fund (ETF) on Jan. 11, reports CoinDesk.

GBTC had existed for 10 years and had more than $28 billion in assets under management at the time of its conversion. Investors withdrew $2.2 billion from the new spot ETF in its first five days of trading, offsetting roughly half of the inflows from the other 10 spot bitcoin ETFs that launched the same day. 

Grayscale does not name its investors, but anonymous sources told CoinDesk that the FTX estate sold off its entire holding of 22 million shares of GBTC, worth close to $1 billion. Unchained reached out to Grayscale but had not received a response by publication time. 

If true, the discovery that the FTX estate is responsible for about half of the outflows changes the narrative about what the flows represent. Some analysts have interpreted the situation as investors fleeing the Bitcoin space entirely. But if a good chunk of the withdrawals were by the beleaguered FTX estate, it is less clear that there is as much cause for concern. 

One analyst has also raised his estimate of how many investors are merely transferring their money from GBTC to another of the spot Bitcoin ETFs. 

Bloomberg ETF analyst Eric Balchunas estimates that around 35% of the GBTC outflows are going to the new ETFs according to a post on X. He revised that figure from 10% primarily to account for retirement accounts, where investors are not subject to capital gains taxes for such portfolio rebalancing moves. 

While the market may be looking at immediate implications of the inflows and outflows from the ETFs, the bigger picture is that the spot Bitcoin ETF story is an evolving, long-term investment that won’t be defined by the GBTC outflows, say some experts.

“[I]t’s important to remember, however, that the main BTC spot ETF impact is from inflows from new investors, which will happen over time as the education machine gets rolling,” Noelle Acheson, author of the Crypto is Macro Now newsletter, told Unchained in an X message.