Grayscale hints at lower fees for its Bitcoin ETF as market matures Grayscale hints at lower fees for its Bitcoin ETF as market matures
Grayscale CEO Michael Sonnenshein said the firm anticipated the heavy outflows GBTC experienced since its launch.
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Updated: Mar. 19, 2024 at 1:53 pm UTC
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Grayscale Bitcoin exchange-traded fund (GBTC) fees will gradually decrease as the market evolves, according to CEO Michael Sonnenshein.
In a March 19 CNBC report, Sonnenshein pointed out that the fee reductions would align with market maturity, saying:
“We have seen this in countless other exposures, countless other markets, you name it, where typically when products are earlier in their lifecycle, when theyโre new to be introduced, these [fees] tend to be higher. And, as those markets mature, and as those funds grow, those fees tend to come down, and we expect the same to be true of GBTC.”
This statement marks a significant shift from the company’s previous stance of maintaining fees for its ETF above the market norm. The firm initially defended these fees, citing the product’s complexity and its established track record in the digital assets sector.
However, its 1.5% fee contrasted sharply with competitors’ rates, which range from 0.2% to 0.5%, with some offering fee waivers as temporary incentives.
GBTC outflows
GBTC has experienced significant outflows totaling nearly $12 billion since its January launch, partly attributed to its comparatively high fees.
Yesterday marked a milestone for GBTC, as it recorded its largest single-day outflow to date, with withdrawals reaching $643 million, according to ETF flows data compiled by Farside Investors.
Sonnenshein acknowledged these outflows, noting that the firm had anticipated them. He highlighted profit-taking investors and arbitragers exiting the fund as contributing factors. He said:
“Of course, we anticipated having outflows. Investors have been wanting to either take gains on their portfolio, or arbitragers coming out of the fund, or people unwinding positions that were part of bankruptcies through forced liquidation.”
Despite these outflows, GBTC remains the largest Bitcoin ETF, managing assets worth $24.7 billionโhigher than BlackRock’s IBIT, whose assets stand at approximately $16 billion.
Meanwhile, Grayscale has filed with the Securities and Exchange Commission (SEC) for a Mini Bitcoin Trust. This forthcoming product will feature reduced fees and be backed by some GBTC shares.
If approved, existing GBTC holders could transition into the new fund without incurring capital gains tax.
Mentioned in this article
Bitcoin 
Grayscale Investments 
BlackRock iShares Bitcoin Trust 
Grayscale Bitcoin Trust 
Michael Sonnenshein Author 
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Grayscale Investments
Established in 2013 by Digital Currency Group, Grayscale Investments is a trusted authority on digital currency investing and cryptocurrency asset management.
BlackRock
BlackRock, synonymous with global asset management, is an American multinational investment management corporation based in New York City.
The BlackRock Bitcoin ETF, known as the iShares Bitcoin Trust (IBIT), is an investment fund that provides regulated exposure to Bitcoin for investors.
The Grayscale Bitcoin Trust (GBTC) is a digital currency investment product that provides investors with access to Bitcoin through traditional investment channels.
Michael Sonnenshein is the CEO at Grayscale Investments, the worldโs largest digital currency asset manager.