Grayscale bitcoin and ethereum trusts generate billions in fees

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Data: Morningstar Research; Graphic: Axios Visuals

Fees are a boon to those who charge them and a noose to those who pay them.

Driving the news: Two grayscale crypto trusts, its bitcoin (GBTC) and ethereum (ETHE) boxes, charge shareholders 2% and 2.5% annually, respectively.

Over the lifetime of these two products, investors have paid around $1.2 billion for GBTC and $387 million for ETHE, according to Morningstar Research. Data assumes current annual fees since the launch of GBTC three years prior to the launch of ETHE in 2017.

Worth noting: See how this fee rose as a percentage of assets at the start of the last crypto bull run in 2020.

Yes, but: if Grayscale were able to convert the trust into a spot bitcoin ETF, the fees should be reduced, although this is unlikely in the short term.

Recall Grayscale is suing the Securities and Exchange Commission for its decision to deny this request.

In summary: this stable and more predictable revenue stream puts Grayscale on firmer ground than its sister units under parent company Digital Currency Group.

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