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Grayscale's bitcoin and Ethereum funds now generate as much revenue as Vanguard's 82 ETFs

Published by Business Insider on Tue, 04 May 2021


<p><img src="https://static4.businessinsider.com/image/5f7def1994fce90018f7ba97-2400/gettyimages-98948348.jpg" border="0" alt="NYSE trader" data-mce-source="Spencer Platt/Getty Images"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><ul><li><strong>The crypto boom in bitcoin and ether has helped Grayscale generate as much revenue as Vanguard does from its suite of 82 ETFs, according to <a href="https://www.etf.com/sections/bitcoin-crypto/grayscales-bitcoin-golden-goose-gbtc'nopaging=1">a report from ETF.com.</a></strong></li><li><strong>Grayscale's bitcoin and Ethereum funds generate nearly $1 billion in estimated combined revenue.</strong></li><li><strong>Bitcoin's and ether's respective year-to-date rise of about 100% and 300% have helped boost Grayscale's assets under management to record levels.</strong></li><li id="recirc"><strong><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">Sign up here for our daily newsletter, 10 Things Before the Opening Bell</a>.</strong></li></ul><hr><p>The <a href="https://www.businessinsider.com/ether-price-outlook-cryptocurrency-outperforming-bitcoin-eth-btc-2021-4">surge in bitcoin and ether</a> over the past year has helped push Grayscale's estimated revenue from just two funds it manages to about $1 billion, the same amount Vanguard generates from its entire suite of 82 ETFs, according to <a href="https://www.etf.com/sections/bitcoin-crypto/grayscales-bitcoin-golden-goose-gbtc'nopaging=1">a report from ETF.com.</a></p><p>The <a href="https://markets.businessinsider.com/currencies/btc-usd">Grayscale Bitcoin Trust,</a> a semi-closed-end fund that charges a 2% annual fee, generates $756 million in estimated revenue on its $36 billion in assets under management.</p><p>When you add in the estimated revenue generated from the <a href="https://markets.businessinsider.com/currencies/eth-usd">Grayscale Ethereum Trust's</a> 2.5% annual fee and its $10 billion in assets under management, Grayscale's two funds generate about $1 billion in annual revenue.&nbsp;</p><p>"For Grayscale to generate close to a $1 billion from just two productsthe amount Vanguard takes in from all 82 of its ETFsis truly impressive," ETF.com analyst Sumit Roy said.&nbsp;</p><p>Grayscale's assets under management have soared to record levels on the back of a big rally in bitcoin and ether, <a href="https://markets.businessinsider.com/currencies/news/ethereum-price-400-billion-market-value-bigger-all-but-13-companies-2021-5-1030385257">which is up 83% and 342% year-to-date, respectively.</a></p><p>Besides the big rally in crypto over the past year, Grayscale benefited from being the only game in town in terms of offering investors the ability to easily add crypto exposure into their brokerage portfolios without having to directly buy bitcoin with a digital wallet.</p><p>That years-long exclusivity gave Grayscale the ability to charge a hefty fee relative to most funds and ETFs.</p><p>But Grayscale's dominance in the bitcoin space could see pressure in the coming months as competition increases. Already, the <a href="https://markets.businessinsider.com/currencies/btc-usd">Osprey Bitcoin Trust</a> undercuts Grayscale's fee by 1.50%, and the <a href="https://markets.businessinsider.com/currencies/news/bitcoin-etf-sec-approval-us-launch-volatility-market-gensler-2021-4-1030374430">SEC is reviewing the approval of several bitcoin ETFs</a>, which could open the floodgates for investors looking too easily add or remove bitcoin from their investment portfolios.</p><p>If the SEC does approve one or many of <a href="https://markets.businessinsider.com/currencies/news/bitcoin-etf-exchange-traded-fund-wisdomtree-us-sec-cryptocurrency-approval-2021-3-1030179702">the pending bitcoin ETF applications</a>, it would likely be both cheaper and easier to access for investors relative to the over the counter crypto trust products from Grayscale and Osprey, as the ETFs would be listed on an exchange rather than on the OTC.&nbsp;</p><p>But with Grayscale's multi-year headstart, it could take a long time for asset management companies to chip away at its success.</p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/ether-price-target-40k-ex-ark-analyst-james-wang-explains-2021-5" target="_blank" rel="noopener">Ex-Ark analyst James Wang breaks down his bull case for Ethereum as its token breaches an all-time high of $3,300and explains why it could eventually reach $40,000</a></em></p><p><a href="https://markets.businessinsider.com/currencies/news/bitcoin-ethereum-grayscale-fund-same-revenue-vanguard-etfs-btc-eth-2021-5-1030386255#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/how-the-1999-russian-apartment-bombings-led-to-putins-rise-to-power-2018-3">How the 1999 Russian apartment bombings led to Putin's rise to power</a></p>
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