Grayscale submitted an application to the U.S. Securities and Exchange Commission (SEC) last month, seeking to issue a mini-version of the Grayscale Bitcoin spot ETF "Bitcoin Mini Trust" (BTC) with lower management fees. Now, according to the latest estimated financial results submitted by Grayscale Report, the ETF will charge a 0.15% management fee, which is lower than all current Bitcoin spot ETFs.
Grayscale GBTC currently charges a management fee of up to 1.5% and continues to experience net outflows of funds. According to the latest documents, when the mini version of GBTC is launched, Grayscale will inject 10% of GBTC’s assets into the fund, and the share of the mini version of GBTC will automatically Issued and distributed to GBTC share holders.
Coindesk reported that the mini version of GBTC aims to provide GBTC investors with an option with lower management fees. Its fees are also more competitive than other Bitcoin spot ETFs approved in January this year. Currently, the lowest-cost Bitcoin spot ETF is Franklin's EZBC has an administrative fee of 0.19%.
The report mentioned that for GBTC investors, the spin-off is regarded as a tax-free event. These investors do not need to pay capital gains tax and can automatically transfer their original shares to the new fund. This pair of investors is sitting on thousands of times of floating profits. Early GBTC investors are quite advantageous. If they want to sell their original GBTC and switch to other competing products with lower management fees, they will face a considerable capital gains tax.
Eric Balchunas, a senior ETF analyst at Bloomberg, reminded that Grayscale releases estimated financial statements, so the management expenses of the mini version of GBTC are only estimated hypothetical data, but the good news is that Grayscale knows that people are paying attention. So choose the extremely low number of 0.15%.
GBTC has had a net outflow of 16.7 billion magnesium so far
According to SoSoValue data , since GBTC was converted into a Bitcoin spot ETF in January this year, there has been a net outflow of up to US$16.7 billion. The current size of GBTC’s assets under management has dropped to approximately US$19.6 billion. Its largest competitor BlackRock IBIT has net funds of US$15.4 billion so far, and its assets under management have grown to approximately US$17.6 billion.
If the mini version of GBTC can be launched, it is expected to restore the competitiveness of Grayscale products. Nate Geraci, president of ETF Store, said that this is a positive factor for Grayscale. Grayscale can even consider setting the management fee of the mini version of GBTC at a lower level. 0.1%, he pointed out that if GBTC maintains a management fee of 1.5%, its asset size will gradually decrease over time.
