Grayscale's CEO confirmed that it will reduce fees for investing in its spot Bitcoin ETF

GBTC's 1.5% fee will be lowered after the fund suffered uninterrupted outflows totaling $12 billion over two months.

Michael Sonnhenshein, CEO of Grayscale Investments, promised to reduce the management fees of the company's spot bitcoin ETF, which has a higher-than-average cost, leading to significant outflows in recent months.

In an interview with CNBC on Monday, the executive promised that fees will gradually decrease as the crypto ETF market matures.

"I am happy to confirm that GBTC's fees will decrease over time as the market matures," he said. ”

Since switching to an ETF on Jan. 11, the fund has reduced its management fee from 2% to 1.5%, in line with previous commitments to investors.

However, many of the same spot Bitcoin ETF products launched on the same day, including those from BlackRock and Fidelity, all had fees below 0.5%.

At the time, Sonnhenshein believed that Grayscale's uniquely high fees were justified by Grayscale's existing liquidity and track record compared to its nascent competitors.

However, on Monday, the CEO claimed that it would be very reasonable for fund providers to reduce their fees over time, as these funds typically charge higher fees at the start of a product's "early lifecycle".

"As these markets mature and these funds grow, these fees tend to come down and we expect the GBTC to do the same," he said. ”

Since becoming an ETF, Grayscale has not experienced a single trading day of net inflows. Instead, investors have sold more than $12.4 billion from the fund as long-term GBTC holders cash in on their gains while new market participants put their capital into cheaper funds.

For example, during the same period, BlackRock's iShares Bitcoin Trust (IBIT) absorbed $12.9 billion in inflows.

Sonnhenshein added: "We're now a bit like we're already at the end of the first game, with pent-up buying demand expected to be met and pent-up sales demand expected to be met. ”