Grayscale currently has a management fee of 1.5%. That is higher than what its competitors are charging. BlackRock and Fidelity charge a lower fee and intend to capture most of the market share. However, there could be a change in the tide, for the Chief Executive Officer of Grayscale has confirmed that they are working to bring down the fees for Bitcoin ETF.
Michael Sonnenshein confirmed that the fee is bound to come down as the market matures. This is probably a hint that the fee remains higher in the initial period and comes down as all the elements start settling on the surface. While the new ETF fee has not been made public, the company will certainly take measures to significantly slash it to benefit existing shareholders.
The confirmation from Michael came at a time when GBTC was noting outflows. They have amounted to $12+ billion to date. March 18, 2024, is when the company noted the highest single-day outflow of $643 billion. Michael said that they had anticipated the outflows. He cited that the reasons expected were – profit taking, coming out of funds, or unwinding positions as a part of bankruptcies via forced liquidations.
Grayscale maintains that it is lowering the price because the market is reaching maturity. Others assume that there is a rise in the competition among players since BlackRock and Fidelity are also attempting to gain the majority of the market.
As for competitors charging lower fees, the Grayscale CEO said it is only because they lack established track records. He justified the high fee by saying it is backed by Grayscale’s track record and GBTC’s liquidity. Also, he said that keeping lower fees by their competitors was a way for them to attract more investors.
Grayscale Bitcoin Mini Trust is entering the market to offer lower fees. The objective is to provide a cost-effective solution compared to GBTC and others. Grayscale is currently awaiting approval from the US Securities & Exchange Commission. Only then will it roll out the product to the market.
There is rising speculation that Bitcoin could soon trade at $100,000. BTC is currently dancing around $63,000, down from ~$73,000, the recent ATH. A resistance level is at $50,000. The nearest target is $100,000, and there is a possibility that it could soon surpass $150,000. Earlier speculation was that it would go as high as $120,000 by the end of 2024; however, analysts have revised the target by $30,000, stating that the Bitcoin market will mature faster.
Not all sights are on the following official announcement by Grayscale or Michael mentioning that they have reduced the Bitcoin ETF fees.