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Grayscale's new ETF product, Bitcoin Mini Trust, has fees set at 0.15%.
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Grayscale announced that it will donate 10% of its Grayscale Bitcoin Trust (GBTC) assets to Bitcoin Mini Trust (BTC).
Grayscale, which currently offers the highest-cost spot Bitcoin ETF, said its planned spin-off version of the fund would have the lowest fee of all at 0.15%, according to Pro Forma Financial in its latest filing. It became clear that it would happen.
The existing Grayscale Bitcoin Trust (GBTC) has a 1.5% fee. If Grayscale's Bitcoin Mini Trust (BTC) is implemented, the filing states that the company will contribute 10% of GBTC's assets to the BTC Trust. BTC Trust shares will be issued and automatically distributed to holders of GBTC shares. (Pro forma financial statements are projections of future expenses and revenues based on a company's past experience and future plans.)
Grayscale's Bitcoin Mini Trust, like other Bitcoin ETFs approved in January, was designed to offer GBTC investors a more competitive, low-fee option. Currently, the 0.19% Franklin Bitcoin ETF (EZBC) is the lowest-cost spot Bitcoin ETF.
The Grayscale spin-off will also be considered a tax-free event for GBTC's existing shareholders, so these investors will not be expected to pay capital gains taxes for the automatic transfer to the new fund. Some early-stage GBTC investors who gained thousands of percent will face a significant taxable event of switching to a competing product with lower fees.
Grayscale's GBTC has been around for more than a decade and was initially offered through a private placement. In mid-2015, the shares began trading publicly on an over-the-counter basis. This continued until January 2024, when GBTC was listed on the NYSE Arca as a Spot Bitcoin ETF, along with other competitors such as BlackRock and Fidelity.
Grayscale currently has approximately $19.6 billion in assets under management. His IBIT fund at its closest rival, BlackRock, has grown to just over $17.5 billion.
Correction (April 20, 2024, 20:44 UTC): Removes reference to number of Bitcoins being moved from GBTC to new fund.
