Grayscale CEO Hints At Slowdown In $15B Bitcoin ETF Outflows

Zinger Key Points
  • High fees of Grayscale's Bitcoin ETF have been a major factor in its outflows, with reductions anticipated over time.
  • Recent data shows a sharp decrease in daily outflows from Grayscale's Bitcoin ETF, down from $600 million in March.

Grayscale, the world’s largest digital currency manager, is seeing a potential slowdown in outflows from its flagship ETF.

What Happened: Speaking on a Reuters podcast, the company’s CEO Michael Sonnenshein suggested that the turbulence caused by the liquidation of assets from bankrupt companies like FTX is now largely resolved.

“Some of the selling connected to settlements of bankrupt crypto companies like FTX is largely behind us,” he said.

When the U.S. Securities and Exchange Commission (SEC) gave the green light for spot bitcoin ETFs, Grayscale’s GBTC GBTC, which has been operational as a trust for several years, began experiencing noticeable outflows.

This shift was likely due to investors moving their funds to newly approved ETFs that offered similar exposure but with potentially lower costs.

A contributing factor to GBTC's outflows has been its relatively high fees in comparison to newer competitors.

Also Read: Senator Elizabeth Warren: Regulating Stablecoins ‘Could Amplify Risks’

However, Sonnenshein is optimistic about the future, stating last month that the fund’s fees “are expected to decrease over time.”

The latest figures from BitMEX Research reveal that while GBTC experienced significant outflows totaling $15 billion over the past three months, the daily outflow rates have decreased from $600 million in March to $303 million and $155 million on subsequent days this week.

What’s Next: This narrative around digital asset management and ETFs is particularly relevant as the industry looks towards Benzinga’s upcoming Future of Digital Assets conference on Nov. 19.

The event promises to delve into various aspects of the digital asset space, including the evolution of investment vehicles such as ETFs.

Insights from leaders like Sonnenshein are expected to highlight the session, offering attendees a comprehensive overview of the current state and future prospects of digital asset investments.

Read Next: Binance Has ‘Moved Past’ Its Old Ways, Says CEO Richard Teng

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