Grayscale GBTC: Why does this dinosaur still dominate despite its exorbitant fees?

I was shocked to learn that 16 months after the launch of spot Bitcoin ETFs, the old Grayscale GBTC continues to drain us with its annual revenues exceeding 268 million dollars! This amount surpasses all other Bitcoin ETFs combined (211 million). Frankly, it blows my mind! How can this outdated product still generate so much money with such high fees? Let me explain to you why this financial behemoth continues to thrive.

1. Scandalous management fees

Let's talk cash: Grayscale takes 2% annual fees from us! It's simply outrageous when compared to modern ETFs that charge less than 1%.

To give you an idea: on 13.4 billion dollars in assets, they pocket 268 million dollars a year. And it doesn't matter whether the market goes up or down, they keep filling their pockets!

2. A historic monopoly that clings on

GBTC was the first Bitcoin fund accessible to traditional investors. This dominant position allowed it to accumulate a colossal fortune in assets under management.

Before the arrival of spot ETFs, it was practically the only way for institutions to invest in Bitcoin without dealing with wallets and private keys. And even now, despite the competition, many investors remain out of pure inertia.

3. The discount trap

GBTC is currently trading at a significant discount to its real value. But here’s the sneaky thing: even when the shares are selling at a bargain price, Grayscale continues to charge its fees based on the total value of the Bitcoins held!

I have always found this system completely unfair. We pay full price for assets that we can't even value properly in the market!

4. Institutional Investors Caught in a Trap

Large investors are often stuck in GBTC for several reasons:

• Regulatory constraints and need for compliance
• Fear of technical complications related to direct ownership
• Specific tax advantages related to the fund structure

It's like being in a 3-star hotel at the price of a five-star palace, but without being able to change establishments because we've already booked for a long time!

5. A closed structure that mainly benefits Grayscale

As a closed trust, GBTC does not allow direct redemptions like modern ETFs. This rigid structure ensures that Grayscale has total control over the assets and stability of income.

Brand effect plays a huge role - many unsuspecting investors continue to choose GBTC simply out of habit or name recognition, without realizing that they could save a lot in fees with the new ETFs.

In my opinion, Grayscale is shamefully taking advantage of its historical position to maintain excessive fees. But be careful, this dominant position will not last forever! As investors become more informed about cheaper alternatives, this giant could see its asset base gradually erode.

The lesson here? In the crypto world as elsewhere, inertia and habits cost us dearly. It may be time for investors to do their homework and question this costly monopoly.