- Grayscale has seen ongoing daily outflows of Bitcoin from its trust shortly before US market open, likely due to its high fees compared to competitors like BlackRock.
- Despite the outflows, Grayscale’s revenues remain significantly higher than competitors at around $381 million annually due to its high 2.5% fee.
- With such high revenue, Grayscale has little incentive to lower its fees to stem outflows, though this means it will continue to see elevated outflows versus competitors.
Grayscale‘s Bitcoin trust has seen daily outflows of Bitcoin shortly before the US market opens each day since converting to a spot ETF. The outflows are likely due to Grayscale’s high fees compared to competitors.
Data Shows Ongoing Outflows
According to data from Arkham Intelligence, Grayscale has continued its pattern of daily Bitcoin outflows from its trust. The outflows occur each day shortly before the US market opens.
Grayscale charges a fee of 2.5%, far higher than competitors like BlackRock which charge around 0.25%. This provides an incentive for investors to leave Grayscale seeking lower fees or to lock in profits from Bitcoin’s appreciation.
Despite Outflows, Revenues Remain High
While seeing continual outflows, Grayscale’s revenues remain significantly higher than competitors due to its high fees. Grayscale generates around $381 million in revenue annually from its Bitcoin trust.
Even if Bitcoin holdings fell to 95,000 BTC, Grayscale would still generate over $60 million in fees annually. This is far above competitors like BlackRock which generates around $3 million in revenue from its Bitcoin ETF.
Little Incentive to Lower Fees
With such high revenue generation compared to competitors, Grayscale has little motivation to lower its fees to stem outflows. It appears comfortable maintaining high fees despite the outflows.
Grayscale’s elevated returns versus competitors will persist due to the large fee discrepancy. Lowering fees at this point would drastically cut into Grayscale’s revenues.