- Grayscale is set to introduce a novel ‘mini’ spot Bitcoin ETF.
- The firm has witnessed massive outflows due to high management fees.
- Analysts believe that the new ‘mini’ ETF could offer a competitive fee structure.
Digital asset management firm Grayscale is taking bold steps to counter its substantial asset outflows by introducing a novel ‘mini’ spot Bitcoin ETF.
The Grayscale Bitcoin Mini Trust (BTC), revealed in a recent filing with the SEC, is designed as a “spinoff” of the original Grayscale Bitcoin Trust (GBTC), inheriting a portion of the assets from the existing fund.
To compensate existing GBTC holders for potential losses, investors will receive shares of equal weight in the new Grayscale Bitcoin Mini Trust. Similar to GBTC, this mini-trust will be backed by Bitcoin, providing direct spot exposure to the leading digital asset.
According to the filing, the spin-off is not expected to trigger tax implications for GBTC or its shareholders. On the other hand, analysts speculate that Grayscale’s decision may be linked to the new fund’s management fee, which has not been disclosed yet.
Bloomberg ETF analyst James Seyffart suggests that the move might be aimed at creating a more cost-competitive product, potentially with a lower fee.
Moreover, Eric Balchunas, another Bloomberg analyst, shared a similar view, anticipating that the new Grayscale Bitcoin Mini Trust could offer a competitive fee structure.
Notably, Grayscale has been facing significant outflows from its Bitcoin Trust (GBTC), primarily due to its comparatively high 1.5% yearly management fee. As reported earlier, the firm wants the SEC to approve options on GBTC to boost adoption.
Despite a fee reduction from its original 2%, the cost remains higher than those imposed by competitors such as BlackRock (0.25% fee) and VanEck (fee waived until next year). The outflows have totaled 229,000 BTC since the emergence of rival funds, making GBTC the second-largest ETF to experience outflows in the last 15 years.
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