Grayscale Mulls Lower GBTC Fees Upon Bitcoin ETFs Maturity

Grayscale Mulls Lower GBTC Fees Upon Bitcoin ETFs Maturity

Grayscale’s Bitcoin exchange-traded fund might has the leading fees attributed to the huge haemorrhage compared to competitors. However, Michael Sonnenshein claimed he was glad to wait.

Michael Sonnenshein believes Grayscale’s flagship Bitcoin exchange-traded fund (ETF) will reduce its charges, the highest U.S. spot Bitcoin ETFs. Nonetheless, this will only happen after the products start ‘maturing.’ 

In an April 10 interview at Canaccord Genuity’s Digital Assets Symposium, he claimed that ‘markets are more likely to be excitable’ when commodity or particular thematic exposure products launch and offer initial assets access to investors. Examples of these products include the Grayscale Bitcoin Trust (GBTC). Sonnenshein said they are still in the same phase for Bitcoin.

GBTC to Lower Fees in Future

Sonnenshein said that the products begin ‘maturing over time, and the market merges as investors allot finances towards a few products. As such, fees also reduce over time. 

Besides, he said that GBTC fees will fall, meaning they seem to be at the end of the initial adoption wave’s initial stint. Sonnenshein noted that new products, such as the newly unveiled Bitcoin exchange-traded funds, generally find their way to wealth management platforms.

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 Sonnenshein also said that those things have not begun occurring yet. Specifically, they are not at that next adoption and growth stage in the United States. 

GBTC’s unveiling happened in 2015 and became an exchange-traded fund at the start of this year. This happened with unveiling nine other Bitcoin exchange-traded funds after Grayscale’s victory in a case against the Securities and Exchange Commission (SEC). 

GBTC’s management charges are the highest compared to all United States exchange-traded funds. It is pinned at 1.5% annually compared to its competitors’ 0.3% average. Since its conversion in mid-January, GBTC has also experienced the highest outflows compared to its competitors. Farside Investors data shows net outflows of $16.1B to April 11. 

Presence of Multiple Issuers for Spot Bitcoin ETFs Beneficial to Ecosystem

Sonnenshein said that following GBTC’s conversion, it became a ‘capital markets and risk conversion tool’ for persons who desire exposure to Bitcoin. Additionally, he said GBTC has a significant share supply, extremely tight spread, and high daily liquidity. A lot of engagement from those kinds of investors has been witnessed.

Despite Grayscale’s early ‘100% market share’ for Bitcoin exchange-traded funds in the United States, Sonnenshein was aware that introducing other issuers into the market ‘would benefit the ecosystem.’ 

Sonnenshein expressed confidence that an increasing tide will lift all boats about the asset class’s adoption, maturation, and accessibility. Some of the world’s leading asset managers have been involved. As such, Sonnenshein believes that this highlights the asset class’ garnering power for likely rally as investor demand for it. 

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