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Grayscale Bitcoin Trust Q1 Performance Analysis
Grayscale, the company behind the world’s largest Bitcoin (BTC) ETF, saw flat revenues in Q1 despite non-stop outflows from its world-famous fund throughout the quarter.
Grayscale’s Q1 Financial Overview
Per a shareholder letter from Grayscale’s parent company, Digital Currency Group (DCG), the Grayscale Bitcoin Trust (GBTC) netted $156 million between January and March – nearly identical to its Q4 2023 figure. This comprised most of DCG’s total revenue of $229 million, up 11% from the prior quarter.
Revenue Breakdown
- Grayscale’s gains were primarily driven by its mining pool giant Foundry and investment platform Luno, up 35% and 46%, respectively.
- Q1 revenue attributable to GBTC exceeded expectations despite expected outflows alongside increased competition under the ETF wrapper.
Changes in GBTC Management Fee
Upon converting into a Bitcoin spot ETF on January 11, GBTC lowered its management fee from 2% to 1.5%, responding to criticisms of being “exploitative”.
Market Dynamics
Most of Grayscale’s competitors launched with lower fees, reducing the incentive for new investors to choose Grayscale. This led to regular outflows from the fund, impacting its Bitcoin holdings.
Asset Under Management (AUM)
Despite outflows, the company’s AUM fell from $30 billion to $18 billion, with BlackRock’s iShares Bitcoin Trust (IBIT) catching up in size.
Future Prospects
Regulators are reviewing Grayscale’s application for an Ether (ETH) spot ETF, with analysts skeptical about its approval odds after the company withdrew its Ether futures ETF application.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
