Grayscale’s Bitcoin Trust: The Unyielding Market Leader in 2025

Grayscale’s Bitcoin Trust (GBTC) has maintained its dominance in ETF revenue in 2025 by generating more income than all combined spot Bitcoin ETFs, primarily due to its high fee structure and strong investor loyalty, despite experiencing significant outflows. Established in 2013 as a private placement, GBTC pioneered regulated Bitcoin investing, providing investors with exposure to Bitcoin’s rapid growth without dealing with digital wallets or unregulated exchanges. On January 11, 2024, it transitioned into a spot Bitcoin ETF after winning a legal battle against the SEC, which highlighted the benefits of ETFs such as lower expenses and better tax efficiency compared to traditional funds.

Despite losing more than half of its assets, with $18 billion in outflows since early 2024, GBTC continues to generate substantial revenue, earning $268.5 million annually—more than the combined $211.8 million generated by all other US spot Bitcoin ETFs, which manage $89 billion collectively. The contrast is notable: BlackRock’s iShares Bitcoin Trust, with $56 billion in assets and a 0.25% fee, earned $137 million in 2024 despite inflows of $35.8 billion and high trading volumes, whereas GBTC’s 1.5% fee, significantly higher, fuels its revenue despite massive outflows of $17.4 billion and a record single-day loss of $618 million in March 2024. Investors often chase lower fees or capitalize on GBTC’s historical discount to net asset value, which fell from 50% to nearly zero by mid-2024.

GBTC’s revenue dominance is supported by its high expense ratio, legacy status, and investor loyalty. The 1.5% fee, much higher than competitors, yields over $268 million annually from $17.9 billion in assets. This high fee structure, while lucrative, is also a vulnerability, as newer, lower-cost products like the Grayscale Bitcoin Mini Trust—launched in 2025 with a 0.15% fee—attract cost-conscious investors but generate significantly less revenue per dollar of assets.

Beyond fees, GBTC’s longstanding reputation and the tax implications for early investors reinforce investor commitment. Since 2013, many investors have bought shares at low prices, and with Bitcoin’s value soaring, selling shares now could trigger significant tax bills, discouraging redemptions. Tax advantages in retirement accounts further enhance its appeal for long-term holders. Psychological factors like loss aversion and trust in Grayscale’s custody services also contribute to investor retention, even amid outflows and market competition.

In summary, GBTC’s ongoing revenue leadership is sustained by a combination of high fees, investor loyalty, tax considerations, and its historic legacy—factors that safeguard its position despite the emergence of cheaper, more liquid alternatives.