Grayscale’s High ETF Fee Keeps the Cash Flowing In Even as Investors Withdraw

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Grayscale’s bitcoin (BTC) exchange-traded fund (ETF) is reaping higher income than its rivals even as investors exit the vehicle for lower-cost options.
The Grayscale Bitcoin Trust (GBTC), with almost $14 billion in assets under management (AUM), is earning about $205 million a year, CoinDesk calculations show. The figure is roughly five times larger than at rival BlackRock iShares Bitcoin Trust (IBIT), with $17 billion in AUM, which is raking in just $42.5 million.
The discrepancy is mainly down to fees, known as the expense ratio. Before the funds opened for trading on Jan. 11, operators jostling for customers started a price war that saw most settling on an expense ratio below 0.40%. GBTC, which existed as a trust before converting to an ETF, stood out, cutting the ratio just half a percentage point to 1.5%.
At the January launch, that compared with 0.20% at Bitwise Bitcoin ETF (BITB), the lowest among the five biggest issuers by assets under management. Ark 21 Shares Bitcoin ETF (ARKB) went to 0.21% while IBIT and Fidelity Wise Origin Bitcoin Fund (FBTC) set it at 0.25%. Grayscale’s Bitcoin Mini Trust (BTC), which started up July 31, now trumps BITB with a 0.15% charge.
Even as investors have withdrawn funds in search of platforms with lower expense ratios, GBTC’s head start means the cash is still flowing in. In January, it had AUM of $29 billion, according to YCharts, a financial analysis platform, and roughly 600,000 bitcoin.
The figure’s shrunk to $13.65 billion, based on multiplying net assets value (NAV) per share of $49.12 by the 278 million shares outstanding. It now holds about 220,000 bitcoin. IBIT, which holds 366,000 bitcoin, has 642 million shares outstanding and a NAV per share value of $35.13, giving AUM of $17 billion.
BlackRock did not respond to an email requesting comment.
UPDATE (Oct. 2, 15:54 UTC): Adds Grayscale’s Bitcoin Mini Trust in fourth paragraph, clarifies that expense ratios cited refer specifically to products launched in January.
Edited by Sheldon Reback.

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As the senior analyst at CoinDesk, James specializes in Bitcoin and the macro environment. Previously, his role as a research analyst at Swiss hedge fund Saidler & Co. introduced him to on-chain analytics. He monitors ETFs, spot and futures volumes, and flows to understand Bitcoin.