In short
- GBTC has maintained its income dominance, producing extra income than BlackRock and different main issuers mixed
- Grayscale’s first-mover benefit sustains its income lead, roughly 16 months after spot ETFs had been accepted.
- Tax implications forestall many buyers from switching to lower-fee alternate options regardless of potential financial savings.
Grayscale’s Bitcoin Belief ETF (GBTC) generates extra income than all different spot Bitcoin exchange-traded funds mixed, regardless of charging charges which might be as much as seven occasions increased than its opponents.
GBTC remains to be “making extra $$$ than all the different ETFs mixed…” Nate Geraci, president of ETF Retailer, said on X on Sunday. “And it is not even shut.”
The fund generates roughly $268.5 million in annual income, with a 1.5% expense ratio utilized to $17.9 billion in belongings underneath administration, in accordance with Coinglass knowledge.
All the opposite U.S.-Bitcoin ETFs proven by Geraci generate an implied annual income of a bit over $211.8 million from a complete of $89 billion in belongings underneath administration.
GBTC’s income dominance persists regardless of dropping greater than half its holdings since spot Bitcoin ETFs went reside in January 2024, revealing how price buildings have formed the fund’s economics, no matter market share.
Other than its first-mover benefit and model recognition, Grayscale’s management over GBTC’s administration permits it to cost a 1.5% price.
For instance, BlackRock’s IBIT holds thrice extra belongings, at $56 billion, in comparison with GBTC’s $18 billion, however it generates solely about $137 million in income with its 0.25% price.
In response, Grayscale launched its Bitcoin Mini Belief (BTC) in March 2025 primarily to supply a lower-cost various to GBTC’s price, whereas additionally diversifying its product lineup amid intensifying competitors.
Lose some, win some
Grayscale’s Bitcoin Belief (GBTC) pioneered regulated Bitcoin funding in 2013 as a non-public belief, earlier than providing an ETF in January of final 12 months, alongside a number of different ETF issuers.
All this rolled into place after Grayscale gained a landmark case towards the then-Gensler-led SEC to transform its belief to an ETF.
When a belief converts to an ETF, key elements of its construction change.
From a closed-end kind, it turns into open-ended, permitting shares to be redeemed based mostly on demand.
As a result of their distribution and transaction prices are totally different and sometimes decrease, the expense ratios for ETFs have been “traditionally lower than these for corresponding mutual funds,” the SEC explains.
As such, ETFs “will be extra tax environment friendly” as a result of ETF shares are typically redeemable “in-kind,” the SEC notes.
In April final 12 months, Grayscale CEO Michael Sonnenshein claimed that the charges “will come down” because the ETF market matures.
The biggest single-day outflow for GBTC was recorded on March 19, 2024, totaling $618 million, in accordance with CoinGlass knowledge.
At this tempo, it may run out of Bitcoin by July 8, although James Seyffart, ETF analysis analyst at Bloomberg Intelligence, beforehand informed Decrypt that its outflows would “gradual from right here.”
Edited by Sebastian Sinclair
Each day Debrief E-newsletter
Begin daily with the highest information tales proper now, plus unique options, a podcast, movies and extra.