Grayscale Bitcoin Trust (GBTC), established in 2013, became a key player in regulated Bitcoin investment, transitioning to a spot Bitcoin ETF in January 2024 after a legal victory against the SEC. Despite significant outflows of over $18 billion since early 2024, GBTC generated $268.5 million in annual revenue, outpacing the $211.8 million from other US spot Bitcoin ETFs. GBTC's 1.5% expense ratio contributes to its revenue lead, even as lower-fee competitors like BlackRock's iShares Bitcoin Trust (IBIT) attract new capital. GBTC's legacy, tax implications, and investor loyalty create challenges for redemption despite the allure of lower fees. Early investors often face substantial capital gains taxes, discouraging them from switching to lower-cost alternatives. Psychological factors such as loss aversion and loyalty also play a significant role in retention, as GBTC remains a trusted choice for many institutional and accredited investors. Grayscale's strategic positioning includes the launch of the Grayscale Bitcoin Mini Trust with a lower fee, but GBTC's higher revenue per AUM ensures its continued dominance in a competitive market.

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