Grayscale’s Quarterly Revenue Was Flat Amid Bitcoin ETF Outflows (2024)

FAQs

Why is Grayscale having outflows? ›

Grayscale has seen outflows of about $17.4 billion since the ETF was converted from a trust in January, according to data compiled Bloomberg, as some investors appear to have shifted assets from GBTC into new, lower-cost funds offered by companies such as BlackRock and Fidelity.

Grayscale's outflows have been due to fees significantly higher than those of its rivals, as well as selling by bankruptcy trustees, analysts said.

But investors shouldn't worry, Grayscale said. The decline was largely expected, as 10% of the bitcoin held by the fund was spun off to create the Grayscale Bitcoin Mini Trust. 1 The additional drop could be attributed to changes in bitcoin's price, which trended about 2% lower in recent trading.

Michael Sonnenshein, CEO of digital asset investment manager Grayscale, sees outflows from the company's bitcoin {{BTC}} exchange-traded fund (ETF) reaching an equilibrium, Reuters reported on Wednesday.

The massive outflows from Grayscale's fund have been attributed, in part, to its high fee structure. Investors in Grayscale's flagship product pay a 1.5% management fee, which is far higher than any of its revival issuers.

The reasons for GBTC's outflows were plenty. Many traders had piled into the ETF ahead of its conversion into an ETF in January to profit from the reduction in its discount to net asset value. After the conversion, they took their profits, fueling outflows from the fund.

“Investors have been wanting to either take gains on their portfolio, or arbitragers coming out of the fund, or people unwinding positions that were part of bankruptcies through forced liquidation.” Market commentators argue that the bankruptcy of crypto giant FTX has played a significant role in the selloff of GBTC.

Grayscale Bitcoin's risk of distress is under 9% at the present time. It has tiny likelihood of undergoing some form of financial distress in the near future. Probability of distress shows the probability of financial torment over the next two years of operations under current economic and market conditions.

According to the latest TipRanks data, approximately 88.22% of Grayscale Bitcoin Trust (GBTC) stock is held by retail investors. Who owns the most shares of Grayscale Bitcoin Trust (GBTC)? Cathie Wood owns the most shares of Grayscale Bitcoin Trust (GBTC).

Grayscale has by far the highest Bitcoin ETF fee (1.50%) of any approved Bitcoin ETF. Premiums or Discounts: GBTC can trade at significant premiums or discounts to the underlying Bitcoin price, affecting investment value. Less Liquidity: Being an OTC product, it lacks the same level of liquidity as a standard ETF.

Who is buying GBTC? ›

Institutional and Fund Ownership - Buyers

Safra Sarasin Holding AG, Harber Asset Management Llc, Nbc Securities, Inc., Citadel Advisors Llc, Cerity Partners LLC, Sanctuary Advisors, LLC, Abacus Planning Group, Inc., and InterOcean Capital Group, LLC .

GBTC - which in January received approval to convert from a trust to an ETF - currently has higher fees than its peers, one of the key factors in drawing investors to rival ETFs, Reuters has reported.

Grayscale Bitcoin's risk of distress is under 9% at the present time. It has tiny likelihood of undergoing some form of financial distress in the near future. Probability of distress shows the probability of financial torment over the next two years of operations under current economic and market conditions.

Total outflows from Grayscale Bitcoin Trust (GBTC) in the last three months topped $15 billion, according to data from BitMEX Research, although the surge in bitcoin's value has helped ensure that Grayscale's assets under management have dipped only slightly to $23.13 billion.

The main reason, as we mentioned above, for this selling pressure is the redemption of GBTC shares by investors. As the price of GBTC has fallen below its net asset value (NAV), investors have been selling their shares, which forces Grayscale to sell the equivalent amount of Bitcoin to meet redemption requests.

Ethereum ETFs offer a regulated and accessible way to invest in ether, but Grayscale's high fees may prompt investors to sell their shares. The Grayscale Ethereum ETF conversion removes discounts and lock-in periods.