Grayscale, a cryptocurrency asset management company, announced that it will launch a new Bitcoin spot ETF with a management fee of 0.15%, the lowest in the industry. Attention is focused on whether the new ETF will reduce selling pressure in the market.
What's new: On the 19th, the U.S. Securities and Exchange Commission (SEC) released documents related to a new Bitcoin spot ETF submitted by Grayscale. This product, named 'Grayscale Bitcoin Trust', uses the ticker BTC and has a management fee of 0.15%, the lowest among existing spot ETFs.
According to published documents, Grayscale plans to list BTC on the New York Stock Exchange (NYSE) and transfer 63,620 bitcoins, which is 10% of the assets of the existing ETF, GBTC (as of early this year), to the new fund, BTC. .
Instead, the newly issued BTC ETF is distributed to existing GBTC holders. They explained, “GBTC shareholders do not need to pay any price or take any other action in connection with the stock split.”
Expected controversy: This approach has two advantages for the industry as a whole. One is that existing GBTC holders can enjoy low management fees without having to dispose of their GBTC in cash and pay taxes. The existing GBTC management fee is 1.5% per year, which is the highest in the industry.
Read more: Why Bitcoin is also rising as prices rise
Why it matters: Grayscale has been operating a trust product called Bitcoin Trust (GBTC) since before the Bitcoin spot ETF was approved earlier this year. After ETF approval, GBTC was converted to ETF, but the highest fee (1.5%) among the launched ETF products became controversial .
The industry estimates that because of this high management fee, many investors have been redeeming ETFs in GBTC for cash right after launch until now. In GBTC, after converting to a spot ETF on January 11, $16.7 billion worth of Bitcoin was cashed out and withdrawn by the 19th, which directly exerted selling pressure on the market. Experts predicted that the outflow would begin to decline starting in April, but the outflow is still continuing.
GBTC still has $19.6 billion worth of Bitcoin remaining. If Grayscale's newly launched BTC fund can reduce GBTC outflow, the Bitcoin price will naturally experience upward pressure. In the current market where spot ETFs dominate supply and demand, this is what most retail investors want.
Read more: All About Bitcoin ETFs
What happens next: Grayscale CEO Michael Sonnenschein said at a digital asset conference on the 12th, “Both GBTC fees and outflow volume are high, but we plan to reduce GBTC fees when the product passes the initial stage of launch and enters maturity.” There is a bar. According to this statement, the moment Grayscale launches the new ETF, BTC, is expected to cause another tectonic shift in the Bitcoin spot ETF industry.
Impact on the market: Bitcoin price, which was hovering around the $63,000 level on the 19th, rebounded by about 2% immediately after the news was delivered. As of the 22nd, after the weekend, the price is hovering around $65,000 per piece.
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