Grayscale’s CEO, Michael Sonnenshein, promises to gradually lower fees on its spot Bitcoin ETF GBTC as this market matures. In an interview with CNBC, he stated, “I’ll happily confirm that, over time, as this market matures, the fees on GBTC will come down.” Earlier, the $26 billion exchange-traded fund defended its costlier-than-market-average charges.
The crypto fund manager imposed a 1.5% management fee for GBTC holders, much higher than the typical rate charged by many ETF providers, including BlackRock and Fidelity. In an evolving market like crypto, it’s common for investment products released earlier in their lifecycle to have higher fees. However, as the market matures, those fees tend to decrease, and we expect the same to be true for GBTC, he emphasized.
Since its launch in early January, GBTC has recorded outflows of more than $12 billion and logged its biggest single daily withdrawals of $643 million this week, according to CoinShares. Sonnenshein said that he is aware of market dynamics and is prepared for fluctuations in investor behavior.
“Of course, we anticipated having outflows,” Sonnenshein told CNBC. “Investors have been wanting to either take gains on their portfolio, arbitragers are coming out of the fund, or people are unwinding positions that were part of bankruptcies through forced liquidation.”
On March 19, the total net outflow of the Bitcoin spot ETF was US$326 million, with net outflows lasting two days. Grayscale ETF GBTC had a single-day net outflow of US$443 million. The Bitcoin spot ETF with the largest single-day net inflow yesterday was BlackRock ETF IBIT, with a single-day net inflow of only $75.23 million.
Bitcoin ETF Fee Battle
Grayscale CEO’s statement comes after VanEck waived all trading fees for its Bitcoin ETF [HODL] from the period starting on March 12, 2024, until March 31, 2025, or until the trust’s assets exceed $1.5 billion. As reported by TronWeekly, the sponsor fee charged on assets over $1.5 billion before and after March 31 will be 0.20%. All investors will incur the same sponsor fee, which is the weighted average of those fee rates.
The announcement has heated up the ETF race as the fee war rages on. VanEck’s decision to eliminate fees for one year was deemed necessary given how HODL has been lagging behind the other ETFs.