Grayscale CEO Reveals When GBTC Fees Will Go Down Amid Concerning Outflows

Grayscale CEO Reveals When GBTC Fees Will Go Down Amid Concerning Outflows

Grayscale’s Chief Executive Officer (CEO) Michael Sonnenshein recently revealed when his company will reduce fund fees for the Grayscale Bitcoin Trust (GBTC). His statement comes amid concerns about outflows from the fund, which have continued to overwhelm the Bitcoin ecosystem

GBTC Fees Will Drop When This Happens

According to a Cointelegraph report, Sonnenshein mentioned during an interview at Canaccord Genuity’s Digital Assets Symposium that GBTC fees will only drop when the Spot Bitcoin ETFs “start to mature.” GBTC has the highest fees among all the Spot Bitcoin ETFs with a management fee of 1.5%, compared to the others, which have fees that range between 0.19% to 0.39%.

However, Grayscale’s CEO doesn’t look so concerned. He said he is happy to wait despite GBTC boasting the most outflows among its competition, an occurrence which could be partly due to its high fees. 

Meanwhile, Sonnenshein elaborated on what it means for Spot Bitcoin ETFs to mature. He remarked that the market will consolidate once this happens, and investors will shift their attention to only a few of these ETFs. For now, he believes that these products are still in the first wave of adoption, and investors are still underinvested in them. 

“Those things really haven’t started happening yet,” Sonnenshein claimed while suggesting there will be so much room for growth for these Spot Bitcoin ETFs. Once this first wave of adoption, he stated that fees would come down over time, which would also cause them to reduce fees on GBTC. He further suggested that this next phase of adoption. 

See also  XRP Wallets Holding At Least 1 Million Coins Nears All-Time High As Sentiment Improves

Grayscale Spot Bitcoin ETF Outflows On The Rise

Grayscale’s GBTC outflows are again on the rise, having slowed at some point last month. Data from Farside Investors shows that the fund has recorded net outflows this week. Its largest outflow this week came on April 8, with $303.3 million flowing out of the fund. Meanwhile, it recorded an outflow of $154.9 million, $17.5 million, and $124.9 million on April 9, 10, and 11, respectively. 

The rise in GBTC’s outflows follows Michael Sonnenshein’s recent interview, in which he shared his belief that the fund has begun to reach an equilibrium. He stated that some of the anticipated outflows are largely behind them now. 

Since converting to a Spot Bitcoin ETF, GBTC has experienced over $15 billion in outflows, negatively impacting Bitcoin’s price at different times. Grayscale has had to offload some of its Bitcoin holdings to fulfill these redemptions, adding significant selling pressure on the flagship crypto. 

Interestingly, Grayscale still holds the most BTC (319,252 BTC) among all the Spot Bitcoin ETF issuers. This is because it had a first-mover advantage, having operated as a close-end fund before the Spot Bitcoin ETFs were approved on January 11.  

GBTC price chart from Tradingview.com (Bitcoin Grayscale)

Leave a Reply

Your email address will not be published. Required fields are marked *