ETFs
Grayscale Quarterly Revenue Remains Stable Amid Bitcoin ETF Outflows
(Bloomberg) — Grayscale Investments’ first-quarter revenue remained flat after the issuer of the world’s largest cryptocurrency investment vehicle decided to hold the line on fees for its exchange-traded fund. flagship Bitcoin exchange.
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The operator of the Grayscale Bitcoin Trust reported revenue of $156 million, little change from the fourth quarter, according to a letter to shareholders from its parent company, Digital Currency Group. Grayscale has seen outflows of about $17.4 billion since the ETF was converted from a trust in January, according to data compiled by Bloomberg, as some investors appear to have moved their assets from GBTC to new funds lower cost offered by companies such as BlackRock and Fidelity. . GBTC charges a 1.5% management fee, while most of its peers charge less than 0.3%.
“While Grayscale expected capital outflows alongside increased ETF competition, first quarter revenue attributable to GBTC nevertheless exceeded our expectations,” the letter said.
The company charged a 2% sponsorship fee before converting the trust. Grayscale also cited higher average Bitcoin and Ether prices for stable revenues, as well as declining assets under management.
All U.S. spot Bitcoin ETFs have seen a total net inflow of more than $11 billion to date, but demand has recently fallen amid tightening financial conditions in the U.S., where the Federal Reserve faces the challenge of overcoming persistent inflation.
DCG’s first-quarter revenue increased 11% to $229 million from the fourth quarter, primarily due to higher asset prices, according to the letter. Revenue growth lagged Bitcoin’s price appreciation, which rose more than 60% during the period. The DCG letter cited “a decline in fees and redemptions from GBTC sponsors, as well as Foundry mining revenue remaining stable.”
Revenue at DCG’s mining subsidiary, Foundry, increased 35% sequentially, according to the letter, driven by revenue from staking and equipment sales. Sales at its subsidiary Luno, a crypto exchange, increased 46% quarter-over-quarter, driven by an increase in trading volume.
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