Grayscale Battling Outflows And Lower-Cost ETFs, Q1 Revenue Stays Flat At $156M
2024年5月10日 - 10:00AM
NEWSBTC
Grayscale Investments, the issuer of one of the recently approved
spot Bitcoin exchange-traded funds (ETFs) in the US, saw flat
revenues in the first quarter of the year due to its decision to
maintain fees on its flagship Grayscale Bitcoin Trust ETF
(GBTC). Grayscale Exceeds Expectations Despite Outflows
According to a shareholder letter from its parent company, Digital
Currency Group (DCG), the operator of the Grayscale Bitcoin Trust
recorded $156 million in revenue, showing little change from the
previous quarter. Related Reading: CryptoQuant CEO Predicts Where
Bitcoin Price Is Headed, Is $265,000 Too Ambitious? Since the GBTC
trust’s conversion to an ETF in January, Grayscale has seen
outflows of about $17.4 billion as investors appear to have shifted
their assets to new, lower-cost funds offered by BlackRock and
Fidelity, the leaders in the US ETF race in terms of inflows
recorded since January. While GBTC charges a 1.5% management
fee, many of its competitors charge less than 0.3%, leading to
outflows. In response, Grayscale announced plans in March to seek
approval from the Securities and Exchange Commission (SEC) to spin
off some of Grayscale’s assets into a new, lower-fee “Bitcoin Mini
Trust.” Despite the outflows, the Q1 revenue attributable to
GBTC exceeded Grayscale’s expectations. The firm had previously
anticipated outflows due to increased competition under the ETF
wrapper. Grayscale previously charged a 2% sponsorship fee before
the trust was converted. The flat revenue was also attributed
to higher average Bitcoin and Ethereum prices and a decrease in
assets under management (AUM). In contrast to Grayscale’s
performance, all US spot Bitcoin ETFs have witnessed a total net
inflow of over $11 billion thus far. However, demand for these ETFs
has recently declined amidst tightening financial conditions in the
US, where the Federal Reserve (Fed) faces the challenge of
addressing persistent inflation. DCG Reports 11% Q1 Revenue
Increase Digital Currency Group, founded by Barry Silbert and the
parent company of Grayscale, reported an 11% quarter-over-quarter
increase in Q1 revenue to $229 million, primarily due to higher
asset prices. However, revenue growth lagged behind Bitcoin’s
price appreciation, which rose more than 60% during the same
period. In its letter, DCG attributed this disparity to lower GBTC
sponsor fees, redemptions, and steady mining revenues at its
Foundry subsidiary. Related Reading: What Triggered The 6,350%
Spike In XRP Long Liquidations Compared To Shorts? Foundry, DCG’s
mining subsidiary, experienced a sequential revenue increase of
35%, propelled by staking and equipment sales revenue. Meanwhile,
Luno, the company’s crypto exchange subsidiary, witnessed a 46%
quarter-over-quarter sales boost, driven by a significant surge in
trading volume. At press time, Bitcoin is trading at $62,100 and
has recently encountered significant price volatility. These price
swings have failed to establish a stable position above crucial
price thresholds. Featured image from Shutterstock, chart from
TradingView.com
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