Grayscale, the world’s largest crypto asset manager, is launching a ‘mini’ version of its $27 billion GBTC bitcoin fund.
Called the Grayscale Bitcoin Mini Trust, Grayscale managed to nab the BTC ticker symbol which was surprisingly unused on the New York Stock Exchange. (BTC is the unofficial ticker symbol used for bitcoin on the crypto exchanges).
BTC will be seeded through a process involving a spin-off from GBTC, where Grayscale will shift bitcoin from the former to the latter.
The newly created BTC shares will then be distributed to shareholders of GBTC pro rata based on a predetermined ratio.
“Following the Spin-Off, (BTC) and GBTC will operate as independent NYSE Arca listed exchange-traded commodity products, and neither will have any share ownership, beneficial or otherwise, in the other,” said Grayscale.
The S-1 filing did not disclose what the BTC management fee will be, but Grayscale is under considerable pressure to offer a more competitive product in the face of increasing competition.
BlackRock’s iShare Bitcoin ETF (IBIT), which has quickly become the most popular bitcoin ETF in terms of inflows, charges just 0.25% of customers’ assets compared to GBTC’s 1.5%.
GBTC’s excessive fee stems from its origination as a closed-end trust.
Grayscale reduced the fee from 2% to 1.5% when it converted the trust to an ETF this January, but it wasn’t enough to stem the $10.5 billion worth of outflows to date.
Despite these outflows, GBTC remains the largest bitcoin ETF with $27 billion in AUM against IBIT’s $13.6 billion, but the gap is becoming increasingly narrow.
Bitcoin ETFs have proved immensely popular after US regulators approved them for trading on January 10.
Nearly $56 billion worth of bitcoin are now held in bitcoin ETFs, with total trading volumes exceeding $109 billion.
Casual week last week for the #Bitcoin ETFs in the Cointucky Derby. $33 Billion in volume and $2.24 Billion in inflows pic.twitter.com/bHEXG7Pzw3— James Seyffart (@JSeyff) March 11, 2024