CEO Michael Sonnenshein, of the digital asset management firm, Grayscale, has announced in an interview with news media outlet, CNBC that there will be a reduction in the fees of its principal product, Grayscale Bitcoin Trust ETF, in the coming months.
With the new arrangement in place, existing customers holding GBTC would be able to pay for the same amount of GBTC and BTC as before with a lower fee. Previously, existing GBTC shareholders who want to convert into BTC will have to pay capital gains tax, but with the new reduction in fees, the charge for converting BTC to GBTC will be zero.
Before the reduction in charge fees as revealed by Sonneshein, the firm has reached out to the U.S. Securities and Exchange Commission to approve its Bitcoin Mini Trust ETF and awaiting its reply.
Known for its high fees, the crypto manager fund charges more than the average cost for Bitcoin ETF, about 1.5% management fee for GBTC holders. Defending the firm’s costlier-than-market-average charges, the CEO mentioned that the GBTC’s liquidity and track record greatly affected the firm’s high fees.
Defending his assertion, he said expensive transaction fees is not peculiar to Grayscale as this happened in ‘countless other exposures, countless other markets.” He added that it is part of a typical product lifecycle of any product at its early stages. Nonetheless, as they matured “those fees tend to come down, and we expect the same to be true of GBTC.”
Grayscale Sees Massive Outflow
Since the SEC’s approval to turn the trust into an ETF earlier in January, Grayscale Bitcoin ETF has become one of the “Newborn Nine” bitcoin ETFs listed in the U.S. as it recorded a large volume of assets.
Some hours ago, data revealed that the fund reached about $12 billion in the number of its outflows, recording its biggest daily outflow on Monday with withdrawals totaling $643 million, surpassing other rival companies.
Words in the market say that the overwhelming increase in the Grayscale Bitcoin ETF outflows is as a result of crypto giant FTX, filing for insolvency in November 2022 and going bankrupt. The firm, which was a major holder of GBTC reportedly sold off the majority of its shares in Grayscale’s bitcoin ETF.
