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Grayscale to Reduce Fees Amidst Investor Shift to Cheaper Bitcoin ETFs

Grayscale Investments faces pressure to lower the fees on its flagship Bitcoin ETF (GBTC), which has experienced significant outflows since its launch. CEO Michael Sonnenshein acknowledged the need to reduce the fund's 1.5% management fee, stating that this is a common trend as markets mature. GBTC once held a dominant position, but the recent approval of multiple spot Bitcoin ETFs with far lower fees has drawn investors away.

Competitors like BlackRock's iShares Bitcoin Trust are attracting substantial inflows thanks to fee waivers and reduced expenses. This highlights a key reason behind GBTC's loss of roughly $12 billion in assets since its ETF conversion. Sonnenshein, however, didn't offer a precise timeline for the GBTC fee reduction.

Grayscale's response and market context

The fee reduction plans come during a decline in Bitcoin's price, which recently fell below $63,000. In an effort to offer a more affordable alternative, Grayscale has filed for a “Grayscale Bitcoin Mini Trust” ETF, designed to carry a smaller fee than GBTC. This new ETF would be seeded with shares from GBTC and distributed to existing shareholders.

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