An estimated $1.1 billion has flowed from Grayscale’s spot Bitcoin exchange-traded fund (ETF) in the last three days of trading as investors rushed to exit the fund after its discount narrowed to the lowest level in nearly three years.

An estimated $594 million of outflows alone came from the third day of trading on Jan. 16, according to an X (formerly Twitter) post by Bloomberg ETF analyst James Seyffart.

Seyffart observed inflows from other recently launched Bitcoin ETFs but wasn’t sure whether those inflows outpaced the Grayscale Bitcoin Trust’s (GBTC) outflows on Jan. 16.

“Most others saw inflows but doubt it’s enough to offset nearly $600 mln out of $GBTC.”

Seyffart and other analysts noted there could be discrepancies when calculating flows due to the accounting and settlement processes typically involved with trading shares.

For several years, GBTC offered a profitable trade for investors who borrowed money to enter the fund and then scalped profit on the Grayscale premium, which reached as high as 43% in July 2019, according to YCharts data.

The GBTC arbitrage trade vaporized when the premium suddenly became a discount in February 2021. Due to the minimum six-month lock-up period imposed on investors purchasing GBTC shares, many investors became trapped in the fund, unwilling to sell their shares at a continually worsening discount.

Following GBTC’s conversion to a spot ETF, the discount has fallen as low as 1.55%, with investors who had their funds locked up for extended periods now hitting the exit.

GBTC’s estimated $1.17 billion outflow equates to about 27,000 Bitcoin at its current price of around $42,800.

Barring the GBTC, 35,761 Bitcoin is held by the nine other spot Bitcoin ETF issuers, according to X account CC15Capital.

Besides Grayscale’s 605,891 Bitcoin, BlackRock’s and Fidelity’s ETFs have tallied 11,439 and 9,750 BTC, CC15Capital’s data shows.

However, the Bitcoin holdings of each ETF issuer may not be up to date.

Meanwhile, Cathie Wood’s ARK Invest has begun stacking its own recently approved ARK 21Shares Bitcoin ETF (ARKB) and sold its shares of the Proshares Bitcoin Strategy ETF (BITO) and other tech-focused shares in its ARK Next Generation Internet ETF.

ARKB currently holds 2,535 Bitcoin, worth over $109 million, the fifth-largest Bitcoin stack among the 10 spot Bitcoin ETF issuers.

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