Since US spot Bitcoin ETFs began trading in January, Grayscale's GBTC has seen billions of dollars in outflows. But its CEO Michael Sonnenshein claims that outflows from the fund are approaching “equilibrium.”
Speaking to Reuters' Inside ETFs, Sonnenshein said GBTC has “started to reach some equilibrium” and argued that outflows from the fund were “expected.” He pointed to the sale in connection with the bankruptcies of FTX and other crypto firms, as well as “some investors who may be making switch trades,” arguing that this phase is largely “behind us.”
“We knew there would be outflows and assumed there would be some outflows,” he said, adding: “GBTC is the security that has been in some of the bankruptcy masses around the crypto ecosystem. These liquidations were “forced,” he said.
GBTC charges a fee of 1.5%. However, competing Bitcoin ETFs' fees are 0.25% or less – and many of the funds offered even lower or no fees when they launched.
Sonnenshein argued that “fees tend to be slightly higher as new categories or new exposures are opened,” adding, “We expect GBTC fees to decline as this market matures.”
Meanwhile, Grayscale has filed for a Bitcoin “mini-trust” to stem ongoing outflows from its flagship product, which Sonnenshein described as a “lower-cost offering that we expect to be able to bring to market,” pending regulatory approval.
He pointed to Grayscale's “entire product family” and noted that investors are diversifying their crypto holdings beyond Bitcoin and Ethereum. “As we look forward, it's again more about attracting more investors into the ecosystem, continuing to innovate on the product front and how we can attract more investors into that ecosystem,” he said.
GBTC outflows show no signs of slowing down as nearly $155 million flowed out of the fund yesterday, resulting in a net loss of $18.6 million across all Bitcoin ETFs, according to data from Farside Investors. According to Grayscale's website, GBTC currently holds just over 318,451 BTC, up from over 618,000 BTC at the start of the year. Daily outflows from the fund currently stand at $261.7 million, with the fund expected to run out of Bitcoin by early July if the current pace of outflows continues.
Asked whether Grayscale would remain independent in the next few years, Sonnenshein replied: “Time will tell.”
Edited by Stacy Elliott.
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