- Grayscale GBTC generated more annual revenues than all other U.S. spot BTC ETFs combined.
- However, GBTC’s BTC has dropped about 70% since its ETF conversion in January 2024.
Despite being the most expensive, Grayscale Bitcoin [BTC] Trust ETF (GBTC) has outpaced the total revenue collected by the rest of the U.S. spot BTC ETFs.
In an X (formerly Twitter) post, Nate Geraci of ETF Store highlighted that GBTC had an implied revenue of $268 million, compared to $211 million from combined collections by the other 11 products.
“Nearly 16 months after spot BTC ETFs launched, GBTC still making more $$$ than all of the other ETFs combined…And it’s not even close.”
Source: X
What’s behind GBTC’s dominance?
After the debut in January 2024, Grayscale’s GBTC saw the heaviest outflows on what analysts linked to investor flight to cheaper alternatives like BlackRock’s iShares BTC ETF.
Source: Coinglass
Before the debut, GBTC held about 619,000 BTC. Sixteen months later, the GBTC’s holdings dropped to 191,000 BTC, a nearly 70% decline in assets under management (AUM).
As shown by Geraci’s data, GBTC charged the highest fees of 1.5% while the rest of the products had an average cost of 0.15%-0.94%. Yet GBTC dominated the overall annual revenue.
According to Bloomberg ETF analyst Eric Balchunas, GBTC’s 1.5% fee was considered average in the traditional ETF market.
However, other analysts pointed out that most investors were captured in GBTC due to the heavy tax implications of switching to a cheaper alternative. Daniel Sempere, a business coach, stated,
“Paying the capital gains to switch out of GBTC is more painful than paying the extra fees, I guess.”
Simply put, the high fees and captive tax implications boosted GBTC earnings. However, can the expected approval of in-kind redemption for ETFs affect GBTC’s moat?
According to experts, in-kind redemption, using BTC instead of cash, would lower the tax burden, especially for large investors. Despite in-kind redemption being tax-efficient, individual investors sitting on massive unrealized gains will still face capital gains tax.
That said, GBTC ranked third on the AUM front with $17.8 billion. The BlackRock iShares BTC ETF topped the AUM list with $54.8 billion, followed by Fidelity’s FBTC at $18 billion.
After the slump in Q1 2025, the spot BTC ETFs saw renewed demand in April, with a whopping $3 billion in inflows.
This boosted BTC’s recovery to $94k, up 26% from the year’s low of $74.5k. In the short term, the $92K range low support and $100K overhead mid-range resistance were key levels to watch.
Source: BTC/USDT, TradingView
