(Reuters) - Outflows from the Grayscale Bitcoin Trust ( GBTC ) may be reaching an equilibrium after months of investor selling, Michael Sonnenshein, CEO of crypto asset manager Grayscale Investments, told Reuters on the latest episode of Inside ETFs.

Grayscale has battled to retain dominance of the bitcoin exchange-traded fund (ETF) market since rival offerings from nine other issuers emerged in January, after the U.S. Securities and Exchange Commission (SEC) approved the launch of the products after a decade-long tussle with the crypto industry.

Total outflows from Grayscale Bitcoin Trust ( GBTC ) in the last three months topped $15 billion, according to data from BitMEX Research, although the surge in bitcoin's value has helped ensure that Grayscale's assets under management have dipped only slightly to $23.13 billion.

"We do believe that the fund has started to reach a little bit of an equilibrium where some of those anticipated outflows, whether it was some of the bankruptcy selling, some investors perhaps undertaking switch trades, (are) largely behind us," Sonnenshein said.

Some of those outflows were the result of selling connected to the bankruptcy settlements of FTX and other defunct crypto companies, Sonnenshein told Reuters, as well as investors selling the Grayscale ETF only to immediately buy another.

Many crypto companies that filed for bankruptcy in 2022 and 2023 had shares of Grayscale's then-trust on their balance sheets and looked to sell those shares once the product converted to an ETF in order to repay creditors. That has yet to be fully reflected in flows data.

While daily outflows currently fall well below the $600 million or so seen in March, they're still solidly in the red. On Monday, Grayscale saw outflows of $303 million, according to BitMEX Research.

"As we look ahead, again, it's more about bringing more investors into the ecosystem (and) continuing to innovate on the product front," Sonnenshein said.

Sonnenshein suggested that Grayscale may take steps to compete with newer rival offerings from BlackRock, Fidelity and others. BlackRock's iShares Bitcoin Trust ( IBIT ), which has a fee of 0.12%, has pulled in some $17.8 billion in assets.

Last month, Grayscale said it will seek approval from the U.S. Securities and Exchange Commission to spin off a still-unspecified portion of the ETF's assets into a new, lower-fee Bitcoin Mini Trust. The company has declined to comment on what those fees would be.

Currently, Grayscale levies a 1.5% percentage fee on its converted ETF, substantially larger than the average fee of about 0.25% charged by most of its newer rivals, with waivers reducing that still further.

"Over time, as markets mature, we anticipate that GBTC's fees will come down," Sonnenshein said.

Bitcoin, the world's largest cryptocurrency, has enjoyed a boost since the ETFs hit the market, and is up more than 60% this year.

Grayscale also hopes to win SEC approval to convert another of its products into a spot ether ETF. The SEC must rule on other similar proposals by late May.

Grayscale sued the SEC after it rejected its application for a spot bitcoin ETF in 2022. An appeals court sided with Grayscale, ordering the SEC to reexamine its decision, which paved the way for the bitcoin ETF approvals in January.

"We're optimistic that the SEC will be on the right side of history here and also permit those products to come to market," Sonnenshein said.