Grayscale CEO Predicts Stabilization of GBTC Outflows

Outflows from the Grayscale Bitcoin Trust ETF (GBTC) have reached an equilibrium, according to the company’s CEO, Michael Sonnenshein, as reported by Reuters.

The executive attributed his expectations to the completion of several transactions involving the sale of GBTC by bankrupt firms. Another reason cited was the peak of a wave of clients switching to alternative products [with lower fees].

“When we look to the future […], we see the attraction of more investors to the ecosystem and continued product innovation,” Sonnenshein shared.

The executive suggested that Grayscale might take steps to strengthen its market position against competitors.

“Over time, as markets evolve, we expect GBTC fees to decrease,” he added.

Currently, Grayscale charges a management fee of 1.5% of assets under management. In comparison, competitors charge 0.25%, often with preferential conditions at the initial stage.

Since the approval of ETFs, outflows from Grayscale’s exchange-traded fund have approached $16 billion. The rise in the value of digital gold has mitigated the decline in AUM in dollar terms ($22.12 billion), according to SoSoValue.

On April 9, the net outflow from GBTC fell to a post-approval low of $17.5 million.

Sonnenshein also addressed the conversion of ETHE into a spot Ethereum ETF.

“We are optimistic that the SEC will be on the right side of history and allow these products to enter the market,” he commented.

In March, Grayscale’s head of legal, Craig Salm, stated that the possibility of converting the trust into an exchange-traded fund remains in May. On March 22, the Commission postponed the deadline for considering the Ethereum Futures Trust ETF application to May 30, 2024.

Back in January, Sonnenshein predicted the collapse of most Bitcoin ETFs.