GBTC Lags Peers in 2026 Due to High Expense Ratio and Phantom Income

Grayscale's Bitcoin Trust (GBTC) has underperformed compared to its peers in 2026, losing 27.08% so far this year. This is not surprising, given its high expense ratio of 1.50%. In contrast, the iShares Bitcoin Trust (IBIT), which charges a much lower fee of 0.25%, lost only 26.77%.

Despite holding less than 15% of the category's aggregate assets, GBTC accounted for 35% of the total weekly outflow in early June 2026. This disproportionate damage occurred because investors shed expensive wrappers first, choosing to lock in profits as rising Treasury yields and crude oil prices shifted the macro outlook.

The grantor trust structure used by spot Bitcoin ETFs creates taxable gains or losses for investors, even if they never sell a single share. This 'phantom income' can lead to automated mismatches with the IRS if not properly reported on Form 8949.