Crypto asset manager Grayscale Investments believes that GBTC “has started to reach a little bit of an equilibrium,” says CEO Michael Sonnenshein, noting that some anticipated outflows from the firm’s spot bitcoin exchange-traded fund (ETF) are “largely behind us.” The crypto asset manager also expects GBTC’s fees to come down “as markets mature.”

Grayscale’s CEO on GBTC Reaching ‘an Equilibrium’

The Grayscale Bitcoin Trust (GBTC) appears to be stabilizing after months of heavy investor selling according to CEO Michael Sonnenshein. He told Reuters on this week’s episode of Inside ETFs:

We do believe that the fund has started to reach a little bit of an equilibrium where some of those anticipated outflows, whether it was some of the bankruptcy selling, some investors perhaps undertaking switch trades, (are) largely behind us.

Sonnenschein explained that part of the outflows stemmed from selling tied to bankruptcies such as crypto exchange FTX, and some investors were simply switching from Grayscale’s ETF to other options. “As we look ahead, again, it’s more about bringing more investors into the ecosystem (and) continuing to innovate on the product front,” the executive opined.

GBTC converted from a bitcoin trust to a spot bitcoin exchange-traded fund (ETF) and began trading on the NYSE Arca on Jan. 11, following the approval of 11 spot bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) the previous day. As of April 12, GBTC’s bitcoin holdings totaled over 314,145, Grayscale’s website shows. According to Bitmex Research, the total GBTC outflow since launch amounted to over $16.27 billion or 305,128 BTC.

Among all U.S. spot bitcoin ETFs, GBTC has the highest annual fee of 1.5% while other funds charge an average fee of around 0.25%. Grayscale is also seeking approval to spin off a portion of GBTC’s assets into a new Bitcoin Mini Trust with a lower fee structure. “Over time, as markets mature, we anticipate that GBTC’s fees will come down,” Sonnenshein stated.

In addition, the largest crypto asset manager is seeking approval from the SEC to convert Grayscale Ethereum Trust into a spot ether ETF. Grayscale previously sued the securities watchdog after the regulator rejected its application to convert its bitcoin trust into a spot bitcoin ETF. An appeals court sided with Grayscale, forcing the SEC to reconsider, which ultimately led to the wave of spot bitcoin ETF approvals in January.

Source : Bitcoin News by Kevin Helms / Apr 13, 2024