Grayscale Investments — the asset manager behind the world's biggest Bitcoin (CRYPTO: BTC) fund Grayscale Bitcoin Trust (OTC:GBTC) — raked in a hefty fee in 2021 for operating the fund.
What Happened: Jameson Lopp, a Bitcoin influencer and founder of a Bitcoin storage app called Casa, pointed out in a tweet that the "Grayscale Bitcoin Investment Trust collected 0.00001879 BTC per share in 2021 for expenses." This adds up to a total of 13,000 Bitcoin for the 692,370,100 outstanding fund shares — translating to "around half a billion dollars at the current exchange rate," according to Lopp.
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Grayscale's official website indicates the Bitcoin Trust currently has $24.2 billion of assets under management, which at the firm's 2% yearly fee would translate to nearly $484 million — pretty close to Lopp's estimate of "half a billion dollars." YCharts data shows that if you are looking for exposure to Bitcoin there's a much better reason to avoid Grayscale's fund than its annual fees.
In December 2020, the Grayscale Bitcoin Trust was trading at prices over 40% higher than the value of the Bitcoin backing it, and has fallen to trading at a discount of over 25% compared to its BTC holdings as of press time. For this reason, many hope that the approval of a physically-backed Bitcoin exchange-traded fund will allow for a regulated route to gaining more accurate exposure to the price of Bitcoin.