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Grayscale’s Michael Sonnenshein backed the longevity of his firm’s spot Bitcoin ETF as it saw over $2.2 billion in outflows less a week after approval.
Holding north of $25 billion in assets under management, Grayscale’s Bitcoin Trust (GBTC) ETF is the biggest spot Bitcoin exchange-traded fund of 11 funds authorized by the United States Securities and Exchange Commission (SEC) on Jan. 10.
Grayscale also boasts the highest fees of the lot at 1.5%, but this will not deter its future success, according to CEO Michael Sonnenshein. Commenting on Bitcoin (<a href="https://crypto.news/price/bitcoin/" target="_blank" rel="noopener noreferrer nofollow">BTC</a>) ETF fees at the annual World Economic Forum in Davos, Sonneshein <a href="https://www.cnbc.com/2024/01/19/grayscale-ceo-all-approved-bitcoin-etfs-wont-survive-defends-fees.html?__source=iosappshare%7Ccom.apple.UIKit.activity.PostToTwitter" target="_blank" rel="noopener noreferrer nofollow">said</a> most of the 11 may not trade on markets in the long run.&nbsp;
Most of these funds from issuers, including BlackRock, Fidelity, and VanEck, charge fees between 0.2% to 0.4%. A few firms also offer zero fees for up to 12 months. The reason for this, Sonnenshein said, is because these funds are new and need to attract investors by slashing the cost.
You might also like: <a href="https://crypto.news/coinbase-dominance-over-bitcoin-etf-custody-raises-concerns/" rel="noopener noreferrer nofollow"> Coinbase dominance over Bitcoin ETF custody raises concerns </a>
On the other hand, Sonnenshein noted that Grayscale has been around for over 10 years with a diverse investor pool and the largest liquidity of any spot Bitcoin ETF. The crypto asset management giant believes less than five Bitcoin ETFs will survive in the long run, and even fewer may attain “critical mass”.
In the first five days since the SEC approved spot Bitcoin ETFs, GBTC has outperformed other products regarding netflows. A bulk of this volume has been <a href="https://crypto.news/grayscale-bitcoin-etf-sees-579m-in-daily-net-outflows/" target="_blank" rel="noopener noreferrer nofollow">outflows</a> from Grayscale’s product.&nbsp;
On-chain data providers like Arkham Intelligence have also <a href="https://crypto.news/grayscale-moved-1-3b-bitcoin-to-coinbase-since-etf-approval/" target="_blank" rel="noopener noreferrer nofollow">tagged</a> corresponding BTC deposits into Coinbase Prime accounts, likely for redemption purposes. Meanwhile, spot Bitcoin ETFs from <a href="https://crypto.news/blackrock-reports-diverse-investor-interest-in-its-spot-bitcoin-etf/" target="_blank" rel="noopener noreferrer nofollow">BlackRock</a> and Fidelity have become two of the fastest in American history to <a href="https://x.com/EricBalchunas/status/1748329579192676431?s=20" target="_blank" rel="noopener noreferrer nofollow">reach</a> $1 billion in assets.&nbsp;
BlackRock alone now <a href="https://crypto.news/spot-bitcoin-etfs-secure-another-10600-btc-in-fifth-day-trading-surge/" target="_blank" rel="noopener noreferrer nofollow">holds</a> over 25,000 BTC valued at about $1 billion with custodian Coinbase. The crypto exchange is navigating ongoing litigation with the SEC over securities violations.
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 After five days of existence the Newborn Nine have about 40% of the bitcoin holdings of MicroStrategy (just to provide a little context) <a href="https://t.co/9WBIKxVF6K" target="_blank" rel="noopener noreferrer nofollow">pic.twitter.com/9WBIKxVF6K</a>— Eric Balchunas (@EricBalchunas) <a href="https://twitter.com/EricBalchunas/status/1748329579192676431?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">January 19, 2024</a>
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Read more: <a href="https://crypto.news/coinbase-vs-sec-judge-scrutinizes-90-year-old-securities-act/" rel="noopener noreferrer nofollow"> Coinbase vs. SEC: Judge scrutinizes 90-year-old securities act </a>

Grayscale CEO: Most spot Bitcoin ETFs will not survive

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