Grayscale’s GBTC could generate an additional $1.5 billion in revenue from Arb Traders: JPMorgan

Before GBTC was registered as an ETF by the trust, it was one of the only ways for U.S. stock traders to gain exposure to Bitcoin price movements without purchasing the actual cryptocurrency. This makes it the world’s largest regulated Bitcoin fund by AUM. The bank Previously estimated Up to $3 billion has been invested in GBTC in the secondary market during 2023 to take advantage of the trust’s discount to NAV. If this estimate is accurate and $1.5 billion has already been taken out, then another $1.5 billion could be taken out through profit-taking on GBTC, which would put additional pressure on the Bitcoin price in the coming weeks. The report said these outflows are putting pressure on GBTC to lower its fees, adding that “GBTC fees of 1.5% still appear too high compared to other spot Bitcoin ETFs, which are at risk of further outflows.” “If GBTC loses its liquidity advantage, more capital could be withdrawn, possibly an additional $5 billion to $10 billion,” the bank warned. As of Friday, GBTC was the most expensive of its counterpart ETFs, some of which charge no fees for the first six months or until certain assets under management (AUM) targets are reached.