Since the U.S. spot Bitcoin ETFs began trading in January, Grayscale's GBTC has seen billions of dollars in outflows. But its CEO Michael Sonnenshein claims that outflows from the fund are approaching "equilibrium."

Speaking to Reuters' Inside ETFs, Sonnenshein said that GBTC "has started to reach a little bit of an equilibrium," arguing that outflows from the fund were "anticipated." He pointed to selling linked to the bankruptcies of FTX and other crypto firms, alongside "some investors perhaps undertaking switch trades," and argued that phase is largely "behind us."

"We knew coming into this and anticipated that there would be some outflows," he said, adding that, "GBTC is the collateral that was inside some of the bankruptcy estates around the crypto ecosystem." Those liquidations had been "forced," he said.

GBTC charges a fee of 1.5%. But rival Bitcoin ETF fees top out at 0.25%—and many of the funds offered even lower fees, or none at all, when they first launched.


Sonnenshein argued that "when new categories or new exposures get opened, fees tend to be a little bit higher," adding that, "we anticipate that GBTC fees will come down as this market matures."

In the meantime, Grayscale has filed for a Bitcoin "Mini Trust" in a bid to stem the ongoing outflows from its main product, which Sonnenshein called a "lower cost offering that we anticipate being able to bring to the market," pending regulatory approval.

He pointed to Grayscale's "entire product family," noting that investors are diversifying their crypto holdings beyond Bitcoin and Ethereum. "As we look ahead, again, it's more about bringing more investors into the ecosystem, continuing to innovate on the product front, and how we can draw more investors into this ecosystem," he said.

GBTC outflows show no sign of letting up, with almost $155 million exiting the fund yesterday, driving flows across all Bitcoin ETFs to a net negative of $18.6 million, per data from Farside Investors. Per Grayscale's website, GBTC currently holds just over 318,451 BTC, against over 618,000 BTC at the start of the year. Daily outflows from the fund currently stand at $261.7 million, with the fund expected to run dry of Bitcoin by early July if the current pace of outflows continues.


Asked whether Grayscale would remain independent over the next few years, Sonnenshein responded that, "Time will tell."

Edited by Stacy Elliott.

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