- Grayscale’s GBTC earned $268M annual revenue despite a 70% AUM drop, outpacing all other U.S. Bitcoin ETFs.
- GBTC’s 1.5% fee and investor tax liabilities have preserved its revenue dominance despite steep outflows to lower-cost ETFs.
- Potential in-kind redemption rules could reshape GBTC’s future as investors seek ways to avoid large capital gains taxes.
Grayscale’s Bitcoin Trust (GBTC) has generated $268 million in annual revenue, surpassing all other U.S. Bitcoin ETFs, even after a 70% drop in assets under management (AUM). Following its conversion to an ETF in January 2024, the fund’s AUM fell sharply as investors shifted to cheaper alternatives.
GBTC continues to generate the most revenue among spot Bitcoin ETFs, even after a substantial decrease in size. President Nate Geraci of The ETF Store insisted that nearly 16 months after spot Bitcoin ETFs took off, GBTC continues to bring in more revenue than its competitors combined.
GBTC’s High Fee Structure Drives Revenue Amid Investor Lock-In
At the time of its ETF launch, Grayscale’s AUM was about 619,000 BTC but it has since fallen to 191,000 BTC. Outflows into cheaper products such as BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s FBTC also largely account for its 70% decline. However, GBTC’s 1.5% annual fee, which is still the highest in the market, has managed to keep it at the top of the revenue leaderboard.
Eric Balchunas, Bloomberg ETF analyst, acknowledged that although GBTC’s fee is high compared to new Bitcoin ETFS, it is in line with some older traditional ETFs thus helping it sustain strong revenue. GBTC is considerably a more costly option for investors than other Bitcoin ETFs, which charge management fees ranging from 0.15% to 0.94%.
However, a high number of investors are prevented from exiting GBTC due to tax implications, even though low-cost alternatives are available. Business strategist Daniel Sempere noted that capital gains taxes on GBTC shares sold are steep enough to dissuade investors from moving their holdings. For many holders the cost of paying capital gains is higher than the cost of continuing to pay the higher fee, he said.
This scenario has caused a dynamic wherein GBTC holds assets through a combination of historical investment and tax considerations despite the availability of more affordable options in the market.
Market Shifts and Potential Changes to Bitcoin ETF Structures
Changes to GBTC’s position might be introduced by the discussions around allowing in-kind redemptions for spot Bitcoin ETFs. In-kind redemption would allow investors exchange ETF shares directly for Bitcoin instead of cash, minimising tax liabilities for large investors. More likely, this could put pressure on GBTC as more holders will be able to exit without generating huge tax bills.
Currently, GBTC stands as the third largest spot Bitcoin ETF by AUM, trailing behind BlackRock’s IBIT ($54.8bln) and Fidelity’s FBTC ($18bln). GBTC generates more revenue than its competitors because of its fee structure and locked-in investor base, despite a steep decline in holdings. After a sluggish first quarter, the spot Bitcoin ETF market experienced renewed momentum in April 2025. During the month, more than $3 billion flowed into spot Bitcoin ETFs coinciding with Bitccoin’s price. Bitcoin rallied strongly from a yearly low of $74,500 to $94,000 — about a 26% increase.
