Grayscale’s CEO said that after a period of sustained investor selling, outflows from the Grayscale Bitcoin Trust (GBTC) may be stabilizing and reaching a state of equilibrium.

Grayscale CEO Michael Sonnenshein predicts that outflows from the Grayscale Bitcoin exchange-traded fund (GBTC) will stabilize and reach equilibrium.

Grayscale has been facing stiff competition in the market since the U.S. Securities and Exchange Commission (SEC) approved its spot Bitcoin exchange-traded fund (ETF) product in January.

Grayscale CEO sees reduced outflows

According to Sonnenshein in a recent Reuters podcast, some of Grayscale’s outflows were caused by sales related to bankruptcy settlements of FTX and other defunct crypto firms.

Additionally, some investors sold Grayscale ETF shares to buy other spot Bitcoin ETFs.

However, Sonnenshein mentioned that the sell-off associated with bankrupt crypto companies such as FTX is "largely behind us." Many of the entities that filed for bankruptcy in 2022 and 2023 held Grayscale's former trust shares on their balance sheets and sought to sell them after the product was converted into an ETF to repay creditors. However, this aspect is not fully reflected in the flow data.

Grayscale also faces higher fees than other ETFs. The digital asset investment manager charges 1.5% on its converted ETFs, which is higher than the roughly 0.25% average charged by most of its newer competitors, even with waivers that further reduce that fee.

Sonnenshein expects GBTC’s fees to decrease over time as the market matures.

Grayscale ETF outflows exceed $15 billion

Data from BitMEX Research shows that total outflows from Grayscale’s Bitcoin Trust (GBTC) have exceeded $15 billion in the past three months. Despite the high outflows, the surge in Bitcoin’s value has helped Grayscale maintain its assets under management at around $23.13 billion.

While daily outflows have fallen from a peak of around $600 million in March, they remain substantial, with Grayscale’s outflows totaling $303 million on Monday alone, according to BitMEX Research.

Sonnenshein mentioned that they are looking forward to expanding their investor base and continuing product innovation. He hinted that Grayscale may take steps to compete with new offerings from firms like BlackRock and Fidelity.

Grayscale is also looking to get SEC approval to convert another of its products into a spot Ethereum ETF. The SEC is expected to rule on a similar proposal by the end of May.

Grayscale previously sued the SEC after its application for a spot Bitcoin ETF was rejected in 2022, and the court ruled in their favor.

Sonnenshein expressed optimism that the SEC will eventually allow these products to come to market, consistent with what he sees as the “right side of history.” #GBTC  #资金流出