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Grayscale’s Bitcoin Trust (GBTC) leads annual revenue among Bitcoin ETFs, generating $268M despite a significant decline in its assets under management.
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Despite recording a staggering 70% drop in AUM since its ETF conversion in January 2024, GBTC continues to outperform all other U.S. spot BTC ETFs.
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“Nearly 16 months after spot BTC ETFs launched, GBTC still making more $$$ than all of the other ETFs combined…And it’s not even close,” stated Nate Geraci of ETF Store.
This article examines Grayscale’s dominance in the Bitcoin ETF market, revealing key revenue figures and insights into its future amidst declining AUM.
What’s Driving GBTC’s Dominance in the Bitcoin ETF Landscape?
Since its transformation into an ETF in January 2024, Grayscale’s GBTC has experienced heavy outflows, primarily as investors shift toward more cost-effective alternatives such as BlackRock’s iShares BTC ETF. This shift has caused GBTC’s holdings to plummet from approximately 619,000 BTC to only 191,000 BTC — a striking 70% decline in assets under management (AUM).
Moreover, according to recent data shared by Geraci, although GBTC charges the highest annual fee of 1.5%, it still leads in overall revenue generation. In stark contrast, the average cost for other ETFs in the market ranges from 0.15% to 0.94%. Bloomberg ETF analyst Eric Balchunas noted that GBTC’s fee remains comparable to traditional ETFs, making its high revenue all the more remarkable.
Interestingly, some investors remain “trapped” in GBTC due to significant tax implications associated with switching to less expensive options. Daniel Sempere, a noted business strategist, highlighted this phenomenon, stating, “Paying the capital gains to switch out of GBTC is more painful than paying the extra fees, I guess.” This emphasizes the complex interplay between AUM, fees, and investor behavior within the ETF ecosystem.
Market Response and Future Outlook for GBTC
Given the ongoing discussions about the potential approval of in-kind redemptions for ETFs, analysts have speculated that such changes could impact GBTC’s market position. Should in-kind redemption be allowed, it would enable investors to use BTC instead of cash during exchanges, significantly reducing tax burdens—particularly relevant for large investors trying to minimize capital gains tax liability.
However, individual investors with substantial unrealized gains will still face potential tax liabilities if they transition away from GBTC. As of now, GBTC stands at a respectable third place in terms of AUM, large behind BlackRock’s iShares BTC ETF, which boasts $54.8 billion, followed by Fidelity’s FBTC with $18 billion.
Notably, following a slump in Q1 2025, the demand for spot BTC ETFs surged in April, capturing about $3 billion in inflows. This rejuvenation has contributed to a price recovery for Bitcoin, which surged to $94k—marking a 26% increase from its year-low of $74.5k. Investors are now closely monitoring the $92k support level and the critical $100k resistance range for potential market movements ahead.
Source: BTC/USDT, TradingView
Conclusion
In summary, despite a significant decline in its assets under management, Grayscale’s GBTC remains a formidable player in the Bitcoin ETF landscape, achieving impressive revenue figures. As the market evolves, how GBTC adapts to emerging trends, such as potential in-kind redemptions, will be critical for its sustainability. Investors should remain vigilant about market dynamics and be prepared for potential shifts in the competitive landscape ahead. It’s essential to stay informed and evaluate options carefully in this rapidly changing environment.
