Grayscale Investments CEO Michael Sonnenshein has observed signs that outflows from the Grayscale Bitcoin Trust (GBTC) are stabilizing. The crypto asset manager has faced significant outflows, topping $15 billion over the past three months, according to a BitMEX Research report. Despite these outflows, the rise in the value of bitcoin means that Grayscale’s assets under management have only fallen slightly to $23.13 billion.
Sonnenshein attributed some of the recent selling pressure to the bankruptcy filings of FTX and other collapsed crypto companies, whose shares in the Grayscale trust were sold to repay creditors. He also noted that some investors have been engaging in rollover trades, selling a Grayscale ETF and immediately buying another ETF. According to Sonnenshein, these factors are largely behind the fund today.
On Monday, Grayscale experienced $303 million in outflows, down significantly from the $600 million daily inflows seen in March. Looking ahead, Sonnenshein stressed the importance of attracting more investors and continuing to innovate their product offerings.
Grayscale is also considering strategies to stay competitive with new entrants to the market, such as BlackRock’s iShares Bitcoin Trust, which charges 0.12% and has amassed $17.8 billion in assets. Grayscale, by contrast, currently charges 1.5% for its convertible ETF, higher than the average fee of about 0.25% charged by most rivals. Sonnenshein suggested that Grayscale’s fees could fall as the market matures.
Additionally, Grayscale has announced plans to seek SEC approval for a new, lower-fee Bitcoin Mini Trust, although the fee structure has not been disclosed. The company is also hoping for SEC approval to convert another of its products into a spot ether ETF, with the SEC expected to rule on similar proposals by the end of May.
The backdrop to these developments includes Grayscale’s legal victory against the SEC, which was ordered by an appeals court to reconsider its rejection of Grayscale’s spot bitcoin ETF application in 2022. The decision led to the approval of the bitcoin ETFs in January. Sonnenshein expressed optimism about the SEC’s future stance on these products. Bitcoin itself has seen a significant rise, up more than 60% this year, which may have contributed to the positive outlook for Grayscale’s products and the broader ETF market.
Source: Investing
