Bitcoin ETFs have grown due to investors seeking the top cryptocurrency. Grayscale’s Bitcoin Trust (GBTC) earns more than other spot BTC ETFs despite higher management costs. GBTC produces more money than its competitors while charging 1.5% compared to 0.15% to 0.94%. How can GBTC stay dominant while its assets are depreciating and it is losing money? Let’s investigate why it works so well.
The Revenue Advantage of GBTC
Although AUM has plummeted approximately 70% in the previous 16 months, GBTC remains the market leader in revenue. It earns $211 million more than all other U.S. spot Bitcoin ETFs combined. This is even more shocking given its price. GBTC produces more money than other Bitcoin ETFs despite lower costs, demonstrating its brand strength and investor loyalty.
Why Investors Stick with GBTC
GBTC’s fees are expensive, but customers worry about their taxes if they transfer. Selling GBTC would result in capital gains taxes, making other ETFs more costly. For many, tax “pain” is greater than GBTC’s additional fees. Because of this, many investors are staying onto GBTC shares instead of transferring to cheaper ones.
In-Kind Redemption: A Tax-Efficient Option for Large Investors
In-kind payments help GBTC maintain its income edge. This allows large buyers to swap shares for Bitcoin instead of cash, reducing their tax burden. Larger investments benefit from tax-efficient in-kind payback. Individual investors are more inclined to stay in GBTC despite increasing fees since moving still involves paying capital gains taxes.
AUM Decline: Is GBTC Losing Its Edge?
GBTC had 619,000 BTC under management 16 months ago. Only 191,000 BTC remain. The decline is 70%. Investors may be less interested, especially if cheaper choices like BlackRock’s iShares BTC ETF grow. This decline in AUM is worrisome, but GBTC is still profitable. The trust is one of the finest Bitcoin ETFs despite having fewer assets.
Renewed Interest in Bitcoin ETFs
Despite a decline in early 2025, Bitcoin ETFs brought in $3 billion in April. This fresh demand drove Bitcoin’s price up 26% from 2025’s low to $94,000. More tax-efficient options may threaten GBTC’s supremacy, but the market’s current direction suggests it will stay huge.
Conclusion
Grayscale’s GBTC is the most lucrative cryptocurrency despite rising fees and falling AUM. Investors don’t want to move because of tax implications, and the trust makes money from in-kind refunds. Cheaper, tax-efficient alternatives may cause GBTC larger issues in the future. It remains the most popular Bitcoin ETF. Its success depends on market fluctuations and new products’ ability to stay up.
