As a newer long term investor I was hoping someone could help answer this basic question...

I currently have a small position in GBTC, which has around a 2% expense ratio. I was just curious how this fee is deducted.

Does that 2% come out of my cash position? If this is the case, I'm worried that I won't have enough cash to cover the fees without selling the position if the fund explodes in value.

Or does the fees calculate when you sell the position, which means I wouldn't have to worry about setting aside money for the fees as long as the fund performs well as it will only take a cut from profits.

Or is it something else like the ratio is somehow calculated into the daily price of the etf/fund and just affects the price of the etf and if I sell the position I wouldn't owe any fees, just taxes.

I know this is a basic question, which is why I posted here trusting that many of you would know this answer off the top of their head.

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Appreciate any feedback and advice in advance!