Summary
Grayscale is launching a new Bitcoin ETF called Grayscale Bitcoin Mini Trust to address outflows from their Grayscale Bitcoin Trust. The new fund will be seeded from GBTC’s Bitcoin stash and existing shareholders will receive shares in the new fund. This move may help attract new investors due to lower fees, as competitors charge significantly less than Grayscale. Lowering fees would hurt Grayscale’s revenue, so this “Spin-Off” approach provides a middle ground.
Key Points
1. Grayscale is developing a new Bitcoin ETF product, the Grayscale Bitcoin Mini Trust, to address the outflows from its Grayscale Bitcoin Trust (GBTC) over the past two months.
2. The new ETF will be seeded as a “Spin-Off” of the GBTC fund, diverting some of GBTC’s Bitcoin stash into the new fund. Existing GBTC shareholders will receive a proportional number of BTC shares.
3. Investors have been moving towards other funds with lower fees, as Grayscale charges 1.5% compared to competitors charging 20 to 30 basis points per year. Lowering fees significantly could impact Grayscale’s revenue, so the “Spin-Off” approach aims to strike a balance between lowering fees and maintaining revenue.