Grayscale Files For ‘Mini’ Bitcoin Spot ETF To Stop GBTC Bleed
Crypto management firm Grayscale has hatched a plan to stop its rapidly accelerating asset bleed – and it involves launching a brand new Bitcoin spot ETF.
The Grayscale Bitcoin Mini Trust (BTC) – as filed for with the SEC on Tuesday – will be designed as a “spinoff” of the original Grayscale Bitcoin Trust (GBTC), inheriting a portion of the original fund’s assets.
To compensate for losses to existing GBTC holders, investors will be given shares of equal weight in the new fund. Just like GBTC, the mini-trust will back its shares with Bitcoin, and provide direct spot exposure to the prevailing digital currency.
“The Spin-Off is not expected to be a taxable event for GBTC or its shareholders,” stated the filing.
With both funds being functionally the same, it raises questions about the reason behind launching a new one. While Grayscale’s full intentions are unclear, analysts believe it has something to do with the new fund’s management fee, which hasn’t been disclosed yet.
“Pretty sure this will be a non-taxable event for a chunk of those shares to get into a cheaper and cost-competitive product,” said Bloomberg ETF analyst James Seyffart, adding that he is “expecting this to have a competitive fee.”
His associate, Eric Balchunas, had the same take.
“Grayscale launching BTC, a mini-me low fee version of GBTC which investors in GBTC will be able to get into without tax hit (I believe) via a special dividend,” he wrote to X.
At present, Grayscale’s Bitcoin Trust (GBTC) charges its holders a 1.5% yearly management fee.
While down from the 2% fee charged before its conversion into an ETF, it is a much heftier cost than that imposed by competitors. BlackRock, for example, only charges a 0.25% fee, while VanEck recently waived its fee
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