Michael Sonnenshein, Grayscale’s CEO, mentioned that their leading Bitcoin (BTC) exchange-traded fund (ETF) will decrease its fees in due time, which is currently the highest among all US spot Bitcoin ETFs. However, he added that this reduction would occur once the products have fully developed.
At Canaccord Genuity’s Digital Assets Symposium on April 10, Sonnenshein remarked that markets often show heightened enthusiasm when new commodity or thematic investment products, including Grayscale Bitcoin Trust (GBTC), make their debut and grant investors initial access to these assets.
“We’re still kind of very much in that phase for Bitcoin,” he said.
As Sonnenshein spoke over time, he described how certain products would develop and eventually reach maturity in the market. Investors tended to concentrate their resources on a limited number of these products.
“That means fees also come down over time. We’ll reduce fees on GBTC, and that also means that we’re kind of at the end of that first inning of that first wave of adoption.”
Normally, newly introduced investments, including newly launched Bitcoin ETFs, get added to wealth management services, according to Sonnenshein.
He continued, “Things haven’t kicked off just yet in the US regarding those developments.” “We’re still in the early stages of acceptance and expansion in this country,” he explained further.
In 2015, GBTC was introduced as a trust, but transformed into an exchange-traded fund (ETF) in January. This change came about at the same time as the introduction of nine other Bitcoin ETFs, following Grayscale’s successful lawsuit against the Securities and Exchange Commission (SEC). The SEC had initially rejected Grayscale’s application to convert GBTC into an ETF, but were compelled to reconsider due to this legal victory.
Among all US Bitcoin ETFs, GBTC charges the highest management fee. Specifically, it’s set at 1.5% per annum, significantly more than the average fee of 0.30% among its competitors.
Since its conversion in mid-January, this fund has experienced the greatest withdrawals among its peers, with a total of $16.1 billion in net redemptions up until April 11, according to Farside Investors’ figures.
After GBTC’s conversion, Sonnenshein described it as a “tool for transferring capital market risks and gaining exposure to Bitcoin.”
“GBTC boasts a substantial number of outstanding shares, high daily trading volume with minimal price difference between buy and sell orders. This has attracted significant interest from investors.”
Although Grayscale initially held a monopoly of “100% market share” for Bitcoin ETFs in the US, Sonnenshein recognized that new entrants into the market would ultimately benefit the ecosystem.
“We really do believe a rising tide does lift all boats when it comes to the adoption, the maturation, the accessibility of the asset class.”
Some large asset management companies have entered this field according to Sonnenshein, indicating once more the longevity and attractiveness of this asset class to investors.
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2024-04-12 04:40