The CEO of digital asset manager Grayscale, Michael Sonneshein, said that fees for the company’s Bitcoin (BTC) exchange-traded fund (GBTC) will decrease over time, CNBC reported. As a result of its high fees, GBTC has seen $12 billion in outflows since January. Before its listing in the US, the fund had the largest assets among the “Newborn Nine” Bitcoin ETFs.Grayscale CEO defends high investor fees

On Monday, GBTC recorded its biggest daily outflow ever with reportedly $643 million in withdrawals.

“Of course, we anticipated having outflows,” Sonnenshein said. “Investors have been wanting to either take gains on their portfolio, or arbitragers coming out of the fund, or people unwinding positions that were part of bankruptcies through forced liquidation.”

A number of market commentators argue that FTX’s bankruptcy has played a significant role in GBTC’s selloff. As of Oct. 25, FTX held about 22 million shares of GBTC before it filed for insolvency in November 2022.

January reports from Bloomberg and CoinDesk suggest the FTX bankruptcy estate sold most of its bitcoin ETF shares.

“None of that came as a surprise, right,” speaking about the outflows Sonnenshein said. “What we’ve seen is GBTC continue to trade liquidly with tight spreads, and across a very diversified shareholder base. So we kind of think we’re between the first and the second inning of this.”

“We’re kind of at the end of that first inning now, where the pent-up demand for buying has hopefully been satisfied, the pent up demand for selling has also hopefully been satisfied,” the CEO added. “And now we’re kind of starting to move towards that second and third inning, where there’s so much more of the market that still is not yet accessing these products.”GBTC fees is highest

GBTC holders pay a 1.5% management fee to the crypto fund manager, much higher than BlackRock and Fidelity charge or any other ETF providers. In an effort to get deposits, Vanguard has waived all fees for investors until March 2025.

According to reports, Sonnenshein defended Grayscale’s high fees saying they were justified by GBTC’s liquidity and track record. He said that the reason other ETFs have lower fees is that their products “don’t have a track record,” and the issuers are trying to lure investors with fee incentives.

“I think from our standpoint, it may at times call into question their long-term commitment to the asset class,” he said.