Grayscale’s Outflows Might Be Nearing Zero. Here’s Why

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Based on the analysis of Bitcoin expert Alessandro Ottaviani, it seems that the large withdrawals from Grayscale’s troubled GBTC product may be coming to a halt.

Because the fee for Grayscale’s Bitcoin Mini Trust may be as little as 0.15%, this is the case.

Not so fast? 

Eric Balchunas, Bloomberg’s senior ETF analyst, has cautioned that these fees could be theoretical in nature.

In simpler terms, this implies that the fund may not always be capable of providing such low fees. Nevertheless, Balchunas views this as a favorable change since Grayscale had no choice but to select that percentage.

Back in March, Grayscale first announced its intentions to start a smaller fund. Notably, this new fund, identifiable by the ticker symbol BTC, promises an advantageous opportunity for current GBTC investors. Specifically, they would be able to acquire ETF shares without triggering any tax liabilities.

Formidable competition 

During this period, BlackRock’s IBIT is projected to exceed Grayscale’s GBTC in terms of total assets under management by the end of this month. Currently, IBIT manages over $17 billion in assets, placing it among the largest ETFs on the market before giants like iShares MSCI Emerging Markets ETF (EEM) and the iShares MSCI Japan ETF (EWJ).

Grayscale’s GBTC has been a significant market hindrance due to its high Bitcoin outflows. Michael Sonnenshein, Grayscele’s CEO, had anticipated that Bitcoin transaction fees would decrease. In contrast, GBTC currently charges the highest fees among Bitcoin ETF providers at 1.5%. As a result, it struggles to match industry giants like BlackRock and Fidelity. For instance, Bitwise provides a remarkably low fee of only 0.2%.

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2024-04-21 11:35