Most Spot Bitcoin ETFs may not survive.
Michael Sonnenschein, CEO of Grayscale Investments, predicts the future for many other Bitcoin Exchange Traded Funds (ETFs) with bold assurance.
In an interview with CNBC, Sonnenshein expressed his skepticism about the long-term viability of rival Bitcoin ETFs.
How Greyscale's CEO Justified the GBTC Spot Bitcoin ETF's High Fees
Greyscale's Bitcoin Trust ETF (GBTC) boasts more than $25 billion in assets under management, making it the world's largest bitcoin fund. This popularity, Sonnenschein argues, is due to a successful track record spanning decades and a diverse investor base.
Unlike its competitors, the Greyscale Bitcoin Trust ETF charges a fee of 1.5%, which is significantly higher than most approved ETFs that charge between 0.2% and 0.4%. According to Sonnenschein, the commitment of funds and experience in the field of crypto will ensure payments.
Read more: What is a Bitcoin ETF?
Investors are weighing things like liquidity and track record and who the actual issuer is behind the product. Grayscale is a crypto specialist. And it paved the way for many of these products to come,” said Sonnenschein.
The crux of Sonnenshein's argument is the long-term sustainability of these rival ETFs. The site notes that two to three Bitcoin ETFs can achieve a significant amount of assets under management. Others, he warned, are at risk of being pulled from the market because they can't get high interest or investment.
“Ultimately, I don't think the marketplace will have the 11 niche products that we find ourselves in,” Sonnenschein said.
Despite Sunshine's argument, the GBTC ETF is losing appeal in the market due to high fees. The screenshot below shows that Greyscale's BTC inventory has dropped by more than 37,740 since Bitcoin ETFs started trading.
The investors may be redeeming their GBTC holdings to move into grayscale competitor ETFs. In addition, price reductions have decreased from 47% in February 2023 to about 1% in 2024. Therefore, some investors who bought GBTC shares at a discount may be booking their profits.
Meanwhile, BlackRock's iShares Bitcoin Trust has reached $1 billion in assets under management (AUM).
Read more: 7 must-have cryptocurrencies for your portfolio before the next bull run
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