Grayscale unveils Bitcoin Mini Trust ETF proposal, targeting reduced fees.
Grayscale has submitted a request to the SEC for approval of a Bitcoin Mini Trust, in an effort to reduce fees associated with its Bitcoin ETF. The goal of the mini trust is to provide a more cost-effective option compared to Grayscale’s current $28 billion GBTC spot Bitcoin ETF. The proposal, outlined in a recent SEC filing, outlines Grayscale’s plan to fund the new offering by reallocating a portion of the shares from its GBTC ETF.
The introduction of the Grayscale Bitcoin Mini Trust aims to decrease the overall fees for current GBTC investors. It promises a reduction in expenses without the added burden of capital gains tax when transitioning to the new fund. This proposal is particularly significant as avoiding capital gains tax has been a key factor in retaining investors in the GBTC, despite its higher fees compared to competitors.
Although the specific fee structure for the mini trust has not been announced yet, industry insiders suggest that it will be competitive and align with the lower end of the market. This positioning will make it an attractive alternative to existing Bitcoin ETF offerings.
Despite the GBTC’s higher fee rate of 1.5%, it has maintained its dominance in the market, even after converting from a closed-end fund to an ETF. This rate contrasts with the lower fees charged by competitors such as Franklin Templeton Digital Holdings Trust (EZBC) and the Bitwise Bitcoin ETF (BITB), which charge 0.19% and 0.2% respectively.
The launch of both a standard and mini version of an ETF within the industry is a common practice that aims to cater to a wider range of investor preferences and financial capabilities.
Despite experiencing a significant outflow of over $10 billion from the GBTC since the approval of several spot Bitcoin ETFs earlier this year, the value of the main fund has remained stable. This stability is mainly attributed to the bullish crypto market, which has offset the impact of these outflows.
