Grayscale Crushes Competitors as Top US Bitcoin ETF Cash Cow
Wall Street’s shiny new spot Bitcoin ETFs? Still playing catch-up. Grayscale’s flagship fund dominates revenue rankings—proving old-guard crypto infrastructure isn’t going quietly.
Fee fat cats sweating bullets
While BlackRock and Fidelity slash fees to attract investors, Grayscale’s 1.5% management cut keeps printing money. TradFi giants learning the hard way: crypto natives built this rodeo.
The irony isn’t lost
After years fighting the SEC for ETF approval, Grayscale now profits most from the very regulatory greenlight that birthed its rivals. Somewhere in DC, a bureaucrat is updating their LinkedIn to ’Web3 visionary.’
Lose some, win some
Grayscale’s Bitcoin Trust (GBTC) pioneered regulated Bitcoin investment in 2013 as a private trust, before offering an ETF in January of last year, alongside several other ETF issuers.
All this rolled into place after Grayscale won a landmark case against the then-Gensler-led SEC to convert its trust to an ETF.
When a trust converts to an ETF, key aspects of its structure change.
From a closed-end form, it becomes open-ended, allowing shares to be redeemed based on demand.
Because their distribution and transaction costs are different and often lower, the expense ratios for ETFs have been "historically less than those for corresponding mutual funds," the SEC explains.
As such, ETFs "can be more tax efficient" because ETF shares are generally redeemable "in-kind," the SEC notes.
In April last year, Grayscale CEO Michael Sonnenshein claimed that the fees "will come down" as the ETF market matures.
The largest single-day outflow for GBTC was recorded on March 19, 2024, totaling $618 million, according to CoinGlass data.
At this pace, it could run out of Bitcoin by July 8, though James Seyffart, ETF research analyst at Bloomberg Intelligence, previously told Decrypt that its outflows would "slow from here."
Edited by Sebastian Sinclair
