Grayscale Expands Product Line and Faces ETF Outflows Amid Growing Crypto‑ETP Landscape

Grayscale Investments, the well‑known crypto asset manager, has announced a dual‑front development that underscores both its ambition to broaden its product offerings and the volatility surrounding crypto‑exchange‑traded products (ETPs). The firm’s newest venture, the Grayscale Stacks Trust (STCK), began trading on the OTCQB market under the ticker BTCSTX on October 23, 2025. This launch signals Grayscale’s entry into the burgeoning DeFi ecosystem, leveraging the Stacks blockchain’s growing prominence among developers and users.

Stacks Trust: Bridging Traditional Investors to a DeFi Platform

Stacks, a layer‑1 blockchain that anchors smart contracts to Bitcoin, has seen a surge in activity, with its ecosystem generating approximately $425 million in monthly fees—a figure highlighted by Grayscale’s recent research report on Solana but also indicative of the broader trend toward high‑throughput smart‑contract platforms. By offering a trust that tracks Stacks’ on‑chain metrics, Grayscale provides institutional and retail investors a regulated, custodial avenue to gain exposure to this layer without directly holding the token.

The trust’s inception follows a period of significant demand for Solana, another platform that has been praised for its low transaction costs and high throughput. While Solana’s fee structure is currently more mature, Stacks’ integration with Bitcoin offers a unique value proposition: the ability to combine Bitcoin’s security with DeFi capabilities.

ETF Outflows Hit a New High

In stark contrast, the broader crypto‑ETF market has been experiencing a pronounced reversal in investor sentiment. On October 22, spot ETFs for Bitcoin and Ethereum recorded net outflows totaling $101.29 million and $18.77 million, respectively. Grayscale’s own Bitcoin trust, GBTC, was among the four funds that reported withdrawals, contributing to the aggregate decline. The outflows reflect a broader reassessment of crypto risk amid heightened market volatility and regulatory scrutiny.

This downturn is particularly noteworthy given the surge in crypto‑ETP filings reported by Bloomberg ETF analyst Eric Balchunas, who noted that as of October 22, there were 155 pending applications in the United States covering 35 different digital assets. Bitcoin and Solana each had 23 filings, while XRP had 20. The rapid pace of new product launches underscores a competitive environment where investors are increasingly cautious about allocating capital to newly created vehicles.

Regulatory Momentum and Market Dynamics

While the U.S. market grapples with ETF outflows, Asia is making strides. Hong Kong’s Securities and Futures Commission approved the first Solana spot ETF on October 22, positioning the territory as a leading hub for regulated digital assets. The approval marks Solana as the third cryptocurrency, after Bitcoin and Ethereum, to receive clearance for a spot ETF in the region.

Simultaneously, U.S. asset manager T. Rowe Price has filed with the Securities and Exchange Commission to launch an actively managed crypto ETF that will target Bitcoin, Ethereum, and Solana. Should the filing gain approval, the fund would aim to outperform the FTSE Crypto U.S. Listed Index and could potentially attract significant inflows from investors seeking active management in a space that has traditionally been dominated by passive strategies.

Market Context: Bitcoin’s Correlation and Investor Sentiment

Bitcoin’s performance in the immediate weeks following the weekend slump has been characterized by a near‑zero correlation with traditional markets, challenging the “digital gold” narrative that has long been associated with the cryptocurrency. While some analysts note that Bitcoin’s correlation has narrowed, the outflows from ETFs suggest that institutional appetite may still be eroding, at least in the short term.

Summary

Grayscale’s launch of the Stacks Trust represents a strategic pivot toward DeFi and layer‑1 blockchains that promise robust on‑chain activity and fee generation. However, the concurrent outflows from crypto‑ETFs, coupled with the rapid proliferation of new product filings and regulatory approvals abroad, paint a complex picture of a market that is simultaneously expanding and contracting. Investors who wish to navigate this environment will need to weigh the potential upside of emerging DeFi platforms against the broader uncertainties that continue to shape the crypto‑ETF landscape.