The history of Grayscale’s GBTC and its rivalry with BlackRock

The 2024 conversion and the massive outflow period

GBTC existed as a private trust for at least 13 years before its conversion to a spot Bitcoin ETF on January 11, 2024. This transition triggered a period of massive outflows. Since the conversion, investors withdrew $28.00 billion from the fund. The exodus was particularly severe in March 2024, when the fund lost $6.36 billion in a single month. On March 18, 2024, $642.5 million left the fund in one day. The continuous cashing out by investors resulted from the popularity of competing spot Bitcoin ETFs. This outflow streak lasted for 11 weeks before the fund saw a $63 million inflow. The competition for market share became intense after the January 2024 launches. The fund also saw 20,000 Bitcoin redeemed early after the launch. Additionally, FTX held over $1 billion in GBTC shares. Alameda Research, an affiliate of the bankrupt exchange, dropped a lawsuit against Grayscale Investments that accused the manager of enriching itself at the expense of shareholders. The fund also saw $302.6 million leave in a single day, showing that the pressure on the fund was constant.

Fee competition and the rise of IBIT

BlackRock’s iShares Bitcoin Trust (IBIT) now manages $67.06 billion in assets, a figure that places it far ahead of the $10.61 billion managed by Grayscale’s GBTC as of October 25, 2026, following a year of intense rivalry. The fee structure is the primary reason for this gap. GBTC charges an annual fee of 1.50%. In comparison, IBIT is priced at 0.12% for the first 12 months and 0.25% thereafter. Other competitors maintain much lower costs. The Grayscale Bitcoin Mini Trust (BTC) has a 0.15% fee and $4.14 billion in net assets. The ARK 21Shares Bitcoin ETF (ARKB) is 0.21% and has $2.9 billion in assets. The VanEck Bitcoin ETF (HODL) is 0.25% and has $1.29 billion in assets. The Franklin Bitcoin ETF (EZBC) is 0.29% and has $469.07 million in assets. The Valkyrie Bitcoin Fund (BRRR) is 0.49% and has $477.59 million in assets.

The difference in fees is a deciding factor for many. While GBTC leads in revenue because of its high charge, its market share fell from 100% to 55%. BlackRock and Fidelity have accumulated $11.5 billion and $7.5 billion in assets respectively. The volatility in the market means IBIT experienced a $37 million contraction on a single day. Will the continuous fee compression from competitors eventually force Grayscale to abandon its current management model?

Legal battles and creditor claims

Legal battles involving bankrupt crypto firms complicated the history of GBTC. Gemini secured 31,180,804 shares of GBTC to protect its Earn users during its dispute with Genesis. Gemini also made legal court claims to approximately 28,000 Bitcoin. Genesis admitted it breached its obligations regarding the delivery of this "Additional Collateral". Judge Lane heard oral arguments regarding the Additional Collateral in January 2024. The Initial Collateral consists of 30,905,782 shares. The SEC declined to appeal its loss against Grayscale in the D.C. Circuit court. This decision followed an August ruling that the SEC arbitrarily rejected Grayscale’s application to convert GBTC into a spot Bitcoin ETF. Grayscale filed an opening legal brief challenging the Commission’s decision. These legal battles involving creditors and bankrupt estates created pressure on the fund’s holdings. Can the fund maintain its stability if more creditors claim specific tranches of Bitcoin?

Bitcoin rally and asset recovery

The 2026 Bitcoin rally helped stabilize GBTC despite the heavy outflows. Bitcoin prices surged to a new all-time high of $120,000. This price increase acted as a subsidy for the fund. Because the value of Bitcoin rose, the total assets under management remained at a higher level. The fund holds approximately 297,000 Bitcoin. As of October 25, 2026, the closing price for GBTC was $62.33. The average entry price for holders is $84,395 per Bitcoin. This means most holders are underwater by 4.9%. GBTC also hit a 52-week high after it rose 135.2% from its 52-week low of $39.56. Institutional holders include Horizon Kinetics Asset Management with 12.1 million shares worth $553 million. LPL Financial holds $39.9 million in shares, and HighTower Advisors holds $27.4 million. Cambridge Investment Research Advisors holds $22.3 million. Mad River Investors holds $16.4 million, and Virtu Financial holds $16.4 million. Jane Street holds $15.5 million, and Citadel Advisors holds $14.3 million. Moors & Cabot holds $13.8 million. The total value of assets held by 594 institutions is $1.27 billion.