Grayscale, the leading digital asset management firm, has submitted paperwork to the US Securities and Exchange Commission to introduce a “Grayscale Bitcoin Mini Trust” identified by the ticker BTC, aiming to offer a more competitive option in the market.
This filing occurred on March 12, signaling Grayscale’s ambition to expand its offerings.
The proposed “Grayscale Bitcoin Mini Trust” plans to feature lower fees and is anticipated to be a derivative of the existing GBTC, as explained by ETF expert James Seyffart.
Seyffart mentioned that existing GBTC investors would receive a portion of their investment in the new trust, though specifics about the fee structure or the exact portion of GBTC to be converted were not provided. Seyffart believes the transition will likely be a tax-neutral event for investors moving to a more economically efficient fund.
Presently, Grayscale imposes a 1.50% annual management fee, notably above the charges of new spot Bitcoin ETFs by competitors like BlackRock, Fidelity, and VanEck, which have significantly lower fees, some as low as 0.25% or even 0% for limited periods.
Eric Balchunas, a senior ETF analyst at Bloomberg, noted the dissatisfaction among Grayscale’s current investors regarding the high fees and sees the introduction of the mini trust as an attempt to appease them without sacrificing substantial revenue.
Despite the option to exit, high capital gains taxes have deterred GBTC investors from pulling out their funds, contributing to a substantial $11 billion loss in assets since its conversion to a spot ETF in January.
Balchunas suggested the new mini trust could mitigate these outflows and potentially attract new investments, citing a better chance for Grayscale to appeal to its client base despite the competitive market.
Meanwhile, James Seyffart highlighted that lowering GBTC’s fees could significantly impact Grayscale’s earnings, describing the new trust as a balanced approach to benefit customers while preserving company profits.
Grayscale CEO Michael Sonnenshein clarified that the prospectus for the new fund is preliminary and subject to change, emphasizing that the sale of these securities awaits the SEC’s approval of the registration statement.