- Sonnenshein stands firm against skeptics by defending the market’s highest fee of 1.5% for Grayscale Bitcoin
Trust ETF (GBTC).
- Grayscale’s Bitcoin Trust ETF has become the world’s largest with $25 billion in assets under management.
- While Grayscale claims superiority in the ETF fee space, recent data indicates a significant outflow from Grayscale Bitcoin Trust (GBTC).
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Grayscale Investments CEO Michael Sonnenshein continues to defend the high fee offered for the Grayscale Bitcoin ETF.
Grayscale CEO Clears Pay Doubts
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Grayscale Investments CEO Michael Sonnenshein continues to defend the high fee offered for Grayscale Bitcoin Trust ETF (GBTC), standing firm against skeptics. Especially with the recent approval of several Spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC), Sonnenshein boldly claims that many won’t survive, questioning their long-term commitment to the asset class.
Meanwhile, against this backdrop, the top executive of Grayscale sheds light on the reasons behind the high fee, emphasizing the unmatched 10-year history of trust, diverse investor base, and broad market liquidity. Grayscale’s Bitcoin Trust ETF has become the world’s largest with $25 billion in assets under management. Particularly noteworthy is Grayscale’s 1.5% fee in an industry where competitors typically prefer lower fees ranging from 0.2% to 0.4%.
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In the meantime, the company’s CEO Michael Sonnenshein justifies this premium fee with factors such as the impressive 10-year history of trust, broad market liquidity, and Grayscale’s focus as a crypto specialist. Sonnenshein, in an interview with CNBC at the World Economic Forum in Davos, argues that other ETF issuers with lower fees are displaying a deficiency and using fee incentives to attract investors.
Additionally, by questioning the commitment of these competitors to the asset class, he highlights that Grayscale’s fee reflects investor priorities such as liquidity, historical performance, and the issuer’s expertise.
Increasing GBTC Outflows Amid Changing Dynamics
While Grayscale claims superiority in the ETF fee space, recent data indicates a significant outflow from Grayscale Bitcoin Trust (GBTC). According to BitMEX Research, a surprising net outflow of $579.6 million was recorded on January 18 alone, and the total net outflow for the past week reached $2.2 billion.
Especially according to market experts, this massive outflow from GBTC is attributed to the launch of spot Bitcoin ETFs and forces Grayscale to liquidate a significant portion of its Bitcoin assets to meet the outflow. In response to concerns about Grayscale’s impact on the market, crypto analyst Scott Melker explains that the asset manager is not actively selling in the market.
Instead, he suggests that the sale of GBTC is due to individuals liquidating their assets, leading Grayscale to sell an equivalent amount of Bitcoin in response. Grayscale is closely monitored by the industry during this transitional period to understand the lasting impact of recent SEC ETF approvals and Grayscale’s strategic fee position.