The world’s biggest Bitcoin ETF manager is working to keep its top spot in the market despite significant outflows from its leading GBTC fund.
To match the low fees of its competitors, Grayscale has applied for a new Bitcoin ETF with a reduced size.
Based on its most recent report to the US Securities and Exchange Commission, Grayscale’s newly launched Bitcoin Mini Trust will charge a management fee of only 0.15%.
Grayscale Mini-BTC Fund
On April 21, Bloomberg ETF analyst Eric Balchunas reacted to the news, exclaiming:
“Impressive! The fees for GBTC’s new BTC counterpart, BTC mini-me, will be only 0.15%, making it the most affordably priced Bitcoin ETF available in the market from Grayscale.”
He noted that the proposed fund fee of 15bps was not set in stone and was just a possibility. “However, since they had to provide a figure for consideration, and given the scrutiny this would be under, they chose 15bps as an example,” he explained.
The Grayscale Bitcoin Trust currently charges a fee of 1.5%, which is higher than some competing funds. Consequently, it has seen a larger reduction in assets under management compared to these lower-fee alternatives.
The Franklin Bitcoin ETF (EZBC) is currently the new fund’s closest competitor, with fees at 0.19%.
Additionally, the company plans to transfer 10% of the assets from its GBTC product to the newly established Bitcoin Mini Trust (BTC) upon launch.
Currently, each Bitcoin Trust unit is valued at approximately 30,500 BTC or around $2 billion. Yet, this amount could decrease before the mini-BTC fund debuts if GBTC continues experiencing significant redemptions.
Furthermore, investors in GBTC will receive shares in the new fund as a distribution.
Since its conversion into a bitcoin spot ETF in mid-January, GBTC has experienced a significant loss and now holds only about 50% of its initial Bitcoin holdings. The latest data shows that the fund currently contains approximately 304,970 BTC after a $45.8 million withdrawal occurred on Friday.
Last week, Grayscale experienced a significant withdrawal of $458 million. However, the pace of these withdrawals began to decelerate towards the end of the week. Notably, on April 19, there were inflows totaling $59.7 million marking the first such day in over a week.
Observe the trend: New investors purchasing Bitcoin ETFs aren’t offloading their holdings. Instead, this represents a strategic, long-term investment decision.
— Thomas | heyapollo.com (@thomas_fahrer) April 21, 2024
ETH ETF Likely Disapproved
On April 19, ETF Store President Nate Geraci said it was “eerily quiet on spot ETH ETFs.”
Industry experts generally anticipated that their actions would not receive approval from the SEC by late May because of insufficient interaction.
Eerily quiet on spot eth ETFs…
Consensus is SEC will disapprove in May. Reason = lack of engagement w/ issuers.
Logic says that’s correct, but also wonder if SEC learned lesson from clown show w/ spot btc ETFs.
Either way, options are either A) approve or B) face lawsuit IMO.
— Nate Geraci (@NateGeraci) April 21, 2024
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2024-04-22 23:16