Bitcoin ETF's high fees are justified by history

Bloomberg – Grayscale Investments CEO Michael Sonnenshein said The 1.5% management fee charged by the Grayscale Bitcoin Fund is the highest of any Bitcoin ETF on the marketis justified by the “size, liquidity and history” of the company.

“As an investor, when choosing between these products, fees are a factor to consider, and the asset manager and issuer are also important considerations, but so is size, liquidity and track record,” Sonnenshein said during an interview on Bloomberg TV from Davos in Davos. Wednesday.

Many nines Rival Bitcoin ETFs offer incentives such as zero fees to attract investors Since its launch last week. Grayscale's fund has seen an outflow of about $1.2 billion since converting the fund into an ETF when regulators approved the funds last week, according to data compiled by Bloomberg Intelligence so far. With the exception of GBTC, all other Bitcoin ETFs saw a net inflow of around $1.9 billion.

VanEck's Bitcoin ETF, which has the second-highest management fees of all new ETFs, costs one-sixth the cost of GBTC, at 0.25%. BlackRock's iShares Bitcoin ETF, which has seen the largest inflow of any Bitcoin ETF since hitting the market last week, has an introductory fee of 0.12%, which increases to 0.25% after 12 months for accounts with less than $5 billion in assets.

Grayscale Investments also filed for a covered ETF one day after the SEC approved Bitcoin ETFs. The company seeks to “provide and provide current income and share in the price return of the Grayscale Bitcoin Trust,” according to the N-1A form filed last Thursday.

“The ability to offer a covered call strategy allows investors to gain passive exposure to GBTC as well as earn additional income,” Sonnenshein said.

The introduction of covered calls has indicated the potential for lower volatility in cryptocurrency markets in the future, but Sonnenschein said investor interest, not volatility, was the main driver behind the introduction of covered calls.

GBTC shares fell for the third straight day, down about 2% to $37.55 as of 1 p.m. in New York. Bitcoin fell about 2.6% to $42,315.

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