- Grayscale, which converted its flagship Grayscale Bitcoin Trust into an ETF in January, saw revenue stay flat as rising crypto prices balanced out heavy outflows and a lower management fee.
- Digital Currency Group (DCG), the parent company of Grayscale, reported revenue of $229 million for the first quarter of 2024.
- Helene Braun is a New York-based reporter covering Wall Street, spot bitcoin ETFs, and crypto exchanges for CoinDesk.
Grayscale, the world’s largest digital currency asset manager, saw its revenue stay flat in the first quarter of 2024 despite converting its flagship Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF) in January.
Rising Crypto Prices Offset Outflows and Lower Fees
The flat revenue was the result of rising crypto prices balancing out heavy outflows from the GBTC Bitcoin Trust and a lower management fee after the conversion to an ETF structure. The conversion to an ETF made it cheaper and easier for investors to gain exposure to Bitcoin through the trust.
Grayscale’s Total Assets Under Management
Grayscale had $24 billion in assets under management at the end of March 2024. That was down from $48 billion at the 2021 peak but up 30% from the end of 2021. The company saw net outflows of $171 million in the first quarter of 2024.
Future Growth Prospects
Grayscale is hoping to see resurgent inflows and growth in assets under management in 2024 if crypto prices continue rising from their current low levels. The firm sees significant long-term growth potential as institutional investors continue allocating to digital assets.
Conclusion
Despite headwinds from heavy redemptions and a lower management fee structure, Grayscale remains well positioned to benefit from growing institutional adoption of crypto as an asset class in the years ahead. The conversion of GBTC to an ETF also positions the firm to better compete with other crypto ETF providers going forward.
