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- The firm plans to lower costs on its GBTC Bitcoin ETF in the coming months.
- The decision is most likely made in response to the persistent withdrawals from GBTC.
Crypto asset manager Grayscale’s chief executive officer Michael Sonnenshein has announced a fee reduction plan for the company’s flagship Bitcoin exchange-traded fund, the Grayscale Bitcoin Trust (GBTC). In a U-turn from defending its increased charges, Sonnenshein said that costs would decrease after GBTC outflows exceed $12 billion.
According to Grayscale CEO Michael Sonnenshein, the firm plans to lower costs on its GBTC Bitcoin ETF in the coming months. Also, the decision is most likely made in response to the persistent withdrawals from GBTC and the enormous market share that rivals like BlackRock and Fidelity are stealing from Grayscale.
Sonnenshein stated in an interview:
“I’ll happily confirm that, over time, as this market matures, the fees on GBTC will come down.”
Increasing Competition
Additionally, he said that fees are often greater in the beginning and then decrease as the market grows and product demand increases.
Since being converted to a spot Bitcoin ETF, GBTC has had net outflows of approximately $12 billion. BlackRock iShares Bitcoin ETF (IBIT) received $451.5 million, while GBTC saw its largest-ever outflow of $643 million on Monday, bringing the total spot Bitcoin ETF outflow to $154.4 million.
GBTC’s management fee of 1.5 percent is much more than that of other Bitcoin exchange-traded fund (ETF) providers like Fidelity and BlackRock. In the midst of intense competition in the Bitcoin ETF market, VanEck has decided to remove fees for its Bitcoin ETF.
Also, the influx of capital into Bitcoin ETFs and the price of BTC in the next months may be affected if Grayscale changes its position and no longer defends its increased fees.