Grayscale's estimated revenues for ETHE and GBTC hit highest level since May 2022

As a number of asset managers line up to gate-crash the crypto fund world with new spot bitcoin ETFs, industry incumbent Grayscale quietly posted its best month in estimated revenues since May 2022. 

According to The Block's data dashboard, Grayscale — a subsidiary of Barry Silbert's Digital Currency Group — clocked in an estimated $44.13 million in revenue from its flagship Grayscale Bitcoin Trust (GBTC) and Ethereum fund, ETHE. 

The calculation is based on the value of the funds' total U.S. dollar holdings each month multiplied by Grayscale's fees. GBTC has a 2% annual fee and ETHE has a 2.5% annual fee.

BlackRock's recent spot bitcoin ETF filing has breathed new life into a beleaguered crypto asset management market, with funds seeing nearly $200 million in inflows last week, according to data compiled by European issuer CoinShares. In the wake of BlackRock's filing, a long list of firms have also resubmitted their applications for a spot bitcoin ETF, including Bitwise, Invesco, and WisdomTree. 

Grayscale looks to upgrade GBTC 

Grayscale has its own ambitions to upgrade GBTC to a spot bitcoin ETF and is currently locked in a legal battle with the U.S. Securities and Exchange Commission to do so. It first submitted its filing in October 2021 to trade GBTC as an ETF on the New York Stock Exchange. That upgrade would grant Grayscale Regulation M relief, which would allow the firm to redeem and create shares, which it currently is restricted from doing. Reg M relief, in theory, would result in GBTC trading at net asset value.

But an upgrade, as well as increased competition, might also hit Grayscale's coffers. 

Seyffart, who recently joined an episode of The Scoop, noted that a BlackRock fund would knock Grayscale's valuation.

“If BlackRock wins approval for their ETF, which isn’t guaranteed, it may decrease Grayscale's valuation because Grayscale would be forced to lower fees sooner than might have been assumed," Seyffart noted.

"On top of that, if GBTC converts to an ETF then the fund will be subject to potential outflows,” he added.