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The operator of the Grayscale Bitcoin Trust had revenue of $156 million, little changed from the fourth quarter, according to a shareholder letter from its parent company, Digital Currency Group. Grayscale has seen outflows of about $17.4 billion since the ETF was converted from the trust in January, according to data compiled by Bloomberg, as some investors appear to have shifted assets from GBTC to new, lower-cost funds offered by firms such as BlackRock and Fidelity. GBTC charges a management fee of 1.5%, while most of its peers charge less than 0.3%.

“While Grayscale expects outflows as competition increases under the ETF wrapper, Q1 earnings attributable to GBTC remain above our expectations,” the letter said.

The company charges a 2% sponsorship fee before the trust is converted. Grayscale also said the higher average price of Bitcoin and Ether led to flat income, as well as lower assets under management.

All US spot Bitcoin ETFs have totaled net inflows of more than $11 billion year to date, but demand has recently slumped amid tightening financial conditions in the US, where the Federal Reserve is facing the challenge of containing stiff inflation.

DCG's revenue in the first quarter rose 11% to $229 million compared to the fourth quarter, driven largely by higher asset prices, according to the letter. Revenue growth lagged behind Bitcoin price appreciation, which increased more than 60% in the period. The DCG letter cited “lower GBTC sponsorship and redemption fees, and mining revenue at Foundry remained flat.”

Revenue at DCG's mining subsidiary Foundry increased 35% sequentially, according to the letter, driven by staking revenue and equipment sales. Sales at Luno's subsidiary, the crypto exchange, increased 46% quarter-on-quarter, driven by a surge in trading volume.