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A recent application revealed on Tuesday has turned all eyes towards Grayscale. It was announced that Grayscale, which manages the $28 billion GBTC spot Bitcoin exchange-traded fund (ETF), plans to introduce a lower-fee version of its ETF. To achieve this, they have requested permission from the US Securities and Exchange Commission (SEC) to distribute a percentage of GBTC shares to generate resources for the new product.
Grayscale Bitcoin Mini Trust
If the Grayscale Bitcoin Mini Trust product is approved, current GBTC investors would benefit from lower fees, and it was indicated that they would not need to pay capital gains tax to automatically transfer to the new fund.
The emergence of capital gains is seen as one of the reasons why GBTC shareholders are currently tied to the existing product, which serves with higher fees compared to the offers they face.
According to a person close to Grayscale, it has been announced that the undisclosed fees could compete with some low-cost bitcoin ETFs on the market.
High Fees in Grayscale Funds
A historic event took place in January when spot Bitcoin ETFs were approved. Following the ETF approval, Grayscale’s old Bitcoin fund, which later transformed into an ETF, the giant GBTC, stood out with a relatively high commission fee of 1.5%.
This rate was significantly higher when compared to the 0.19% of Franklin Templeton Digital Holdings Trust (EZBC) and 0.2% of Bitwise Bitcoin ETF (BITB). Introducing a new spot Bitcoin ETF and a mini version is not an unknown situation in the ETF industry.
Since the spot Bitcoin ETF approval in January, more than $10 billion has exited from GBTC. Nevertheless, the main fund paved the way to maintain the value of the original asset thanks to a bull market variant from rallying crypto markets.
Additionally, fees will likely remain a decisive factor for a community of registered investment advisors (RIAs) and networks of brokers ready to recommend bitcoin ETF products to clients.
Therefore, creating a cheaper Grayscale alternative could be considered sensible for the company’s future. Following a potential approval, Grayscale Bitcoin Mini Trust aims to be traded on NYSE Arca under the BTC ticker.
