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Grayscale wants to launch a spinoff of its spot Bitcoin exchange-traded fund, GBTC<\/a>, according to a regulatory filing<\/a> on Tuesday.<\/p>\n The asset manager has asked the Securities and Exchange Commission<\/a> for permission to launch \u201cBitcoin Mini Trust\u201d ($BTC), a low-fee version of GBTC, which currently has over $28 billion assets under management. Shares of the new ETF would be distributed among shareholders of the original product.<\/p>\n \u201cGrayscale knows that its current investors are not thrilled with the fees<\/a> that they\u2019re being\u00a0charged, and so this is a way to throw them a bone,\u201d Eric Balchunas, Bloomberg\u2019s senior ETF analyst, told Fortune<\/em>.<\/p>\n It\u2019s happening! @Grayscale<\/a> just filed to launch the \u201cGrayscale Bitcoin Mini Trust\u201d expecting this to have a competitive fee. It will trade under the ticker $BTC<\/a> and will come from a spinoff from $GBTC<\/a>. This means $GBTC<\/a> holders will get some % of holdings spun off into $BTC<\/a>. pic.twitter.com\/JAKMcKfn5o<\/a><\/p>\n \u2014 James Seyffart (@JSeyff) March 12, 2024<\/a><\/p><\/blockquote>\n <\/p>\n Existing GBTC investors would automatically be opted in for it, and a portion of their shares would be subjected to lower fees without needing to pay capital-gains taxes to transfer into the new fund. <\/p>\n Capital gains taxes are the predominant reason current GBTC shareholders have refrained from withdrawing their money, tying them to a fund with 1.5% fees, higher than competitors that are charging 0.25% or less. VanEck yesterday announced it was temporarily cutting fees to 0%.<\/p>\n While the fees for the new Grayscale product haven\u2019t been disclosed, they\u2019ll be competitive with similar products, someone close to the matter told Fortune<\/em>.<\/p>\n \u201cWhile this may curb their outflows a little, it gives them a shot at inflows,\u201d Balchunas said.\u00a0But entering the race with a low-fee product this late could prove tricky. \u201cIt\u2019s still going to be difficult for the Bitcoin Mini Trust to get new flows, but I think they have much more of a fighting chance now\u2014especially for their network of clients.\u201d<\/p>\n \u201cI honestly think they should have done this earlier,\u201d added Balchunas.<\/p>\n Competitive fees may cement the new trust\u2019s role as an \u201ccontender\u201d in the ETF battle, Terrence Yang, managing director of Swan Bitcoin, told Fortune<\/em>, but \u201cthis is BlackRock<\/a> and Fidelity\u2019s race to lose\u2014they\u2019re breaking away from the others.\u201d<\/p>\n So they keep milking the Brokie funds but let normies roll into a cheaper variant, not a bad idea<\/p>\n Grayscale Investments Intends to Seed the Trust Through a Spin-Off Resulting From Contributions by Gbtc \u2013 Filing<\/p>\n Grayscale Investments: Mini Trust Intends to List Shares on NYSE\u2026 https:\/\/t.co\/qLnrPzBx70<\/a><\/p>\n \u2014 Fofty Pawlow (@FoftyPawlow) March 12, 2024<\/a><\/p><\/blockquote>\n <\/p>\n So, why doesn\u2019t Grayscale just lower GBTC\u2019s fees?<\/p>\n \u201cOf course they could, but then they\u2019d lose $100 million in revenue, minimum, by the end of the year. That\u2019s a tough sell,\u201d VettaFi financial futurist Dave Nadig told Fortune<\/em>.<\/p>\n Money has been pumping into the nine spot Bitcoin ETF funds, roughly $9.6 billion in total, with BlackRock and Fidelity<\/a> dominating about 80% of the inflows, according to Bloomberg data. However, outflows continue to trickle out of GBTC, amounting to about $10.5 billion.<\/p>\n The products have made it easier for retail investors and IRA holders to gain exposure to Bitcoin without needing to buy it from a crypto exchange or navigate on-chain wallets. Inflows reached a record high last week of $2.24 billion and, as of Monday, collectively some $55 billion in assets under management has been accumulated in barely two months of trading, Bloomberg data shows.<\/p>\n<\/div>\n\n\n
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