Grayscale Bitcoin Trust: reorganization and possible changes๐ฐ
We're sure you've heard by now that Grayscale Investments CEO Michael Sonnenschein has resigned after a decade in office, and Peter Mintzberg from Goldman Sachs will take over as the new CEO in August.
Mintzberg will lead Grayscale at a difficult time, as the company's bitcoin fund, Grayscale Bitcoin Trust ($GBTC), has experienced massive outflows of more than $17 billion since becoming an exchange-traded fund in January.
๐ Why is this happening?
While its competitors offer low fees - BlackRock's iShares Bitcoin Trust charges about 0.25% (0.12% for the first 6 months), Fidelity - 0.39%, Ark - 0.21%, and Bitwise - 0.20% (both have zero fees for the first 6 months); Grayscale continues to charge a high fee of 1.5%. Therefore, such a significant difference is likely to be the main factor behind the significant outflow of funds from GBTC.
๐ Today, the number of BTC on the balance sheet is 290 thousand, although 3 months ago, before the structure was changed, they held about 624 thousand. Given the level of commission, outflows from the fund have led to a decrease in Grayscale's profits by about $144 million annually. Given the current size of the assets ($19.4 billion), the current fees are about $290 million annually.
๐ฌ The details of this reorganization are not disclosed, but it is widely believed that Mintzberg will be able to overcome the outflow trend and increase investor confidence in the fund.