Grayscale, a major player in cryptocurrency investments, is set to launch a new Bitcoin mini-trust with a groundbreaking fee of 0.15%, according to reports from Coindesk on April 22. This move aims to undercut the current lowest-cost spot bitcoin ETF, the Franklin Bitcoin ETF (EZBC), which charges a 0.19% fee.
ETF Expense Ratio: (Source: Coinglass)
The decision to introduce this new offering follows significant outflows from Grayscale Bitcoin Trust (GBTC). The trust's Bitcoin holdings have plummeted from 622,000 before the ETF launch on Jan. 11 to around 300,000 as of April 19, as reported by Glassnode. The high 1.5% fee associated with GBTC has been a key factor driving these outflows, especially as competing ETFs offer lower fees.
GBTC ETF Balance: (Source: Glassnode)
The proposed mini-trust presents a tax-efficient solution for investors looking to convert their holdings, as the transition would not trigger taxable events. This is particularly appealing for investors holding substantial unrealized gains due to GBTC's significant discount over the years.
GBTC Discount or Premium to NAV Chart: (Source: ycharts)
According to an SEC filing, GBTC will contribute 63,204 BTC to the new BTC Trust, issuing and distributing 692,370,100 shares of the trust to GBTC shareholders. With a Sponsor’s Fee set at 0.15%, the new trust emerges as the most cost-effective option in the spot Bitcoin ETF market.
Eric Balchunas, Bloomberg’s senior ETF analyst, cautions that the 0.15% fee is based on pro-forma financials and remains hypothetical, stating, "It doesn't [necessarily] mean BTC will be 15bps."
In summary, Grayscale's introduction of a new low-fee Bitcoin mini-trust signals a competitive shift in the cryptocurrency investment landscape, offering investors a potentially more cost-effective option in the market.
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