Michael Sonnessien, the CEO of Grayscale, anticipates that withdrawals from the Grayscale Bitcoin ETF (GBTC) will even out and balance at a certain point.
Since January, when the SEC gave its approval, Grayscale has encountered intense rivalry in the market for Bitcoin ETFs that trade in grayscale.
Grayscale CEO Sees Outflows Reducing
Based on Sonnenshein’s explanation in a recent Reuters podcast, some of Grayscale’s investors sold their shares due to the bankruptcy settlements of FTX and other failed crypto companies. Furthermore, some investors shifted their investments to other Bitcoin spot ETFs by selling their Grayscale ETF shares.
Sonnenshein noted that the sale of crypto company bankruptcy cases like FTX is mostly completed. Many bankrupt companies from 2022 and 2023 held shares of Grayscale’s former trust on their balance sheets, intending to sell them after the product transformed into an ETF to repay creditors. However, this activity hasn’t been fully captured in the flow data yet.
The digital asset investment manager, Grayscale, faces higher fees compared to other ETFs. Specifically, Grayscale charges a fee of 1.5% on its converted ETF. This is more than the typical fee of around 0.25% among newer competitors, even after factoring in any waivers that might have brought down their fees.
Sonnenshein anticipates that as markets mature, the fees for GBTC will decrease over time.
Grayscale ETF Outflows Exceed $15 Billion
Over the last 90 days, BitMEX Research data reveals that over $15 billion worth of Bitcoin has been withdrawn from the Grayscale Bitcoin Trust (GBTC). Remarkably, this significant outflow has not diminished Grayscale’s total assets under management, which currently stand at approximately $23.13 billion, due to the substantial increase in Bitcoin’s value.
Despite a decrease from the peak of around $600 million daily withdrawals in March, Grayscale still experiences significant outflows. For instance, on Monday, there were withdrawals amounting to $303 million as reported by BitMEX Research.
Sonnenshein expressed his excitement about broadening their investor pool and advancing product development. He suggested that Grayscale could respond to emerging competition from industry giants such as BlackRock and Fidelity.
Grayscale intends to seek the SEC’s approval to transform another product into an Ethereum exchange-traded fund (ETF), with decisions on comparable applications anticipated by late May. Previously, Grayscale initiated a lawsuit against the SEC when their application for a Bitcoin ETF was declined in 2022; subsequently, a court ruled in their favor.
Sonnenshein expressed confidence in the SEC’s upcoming decision, assuming it would allow the products into the market, which he believes is consistent with historical progress.
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2024-04-11 07:16