Grayscale intends to charge a management fee lower than that of GBTC and fair enough to compete with other products.
Grayscale Investments, one of the leading asset management firms in the United States, has submitted an application to the country’s Securities and Exchange Commission (SEC) to launch a mini spot Bitcoin exchange-traded fund (ETF).
According to a tweet announcing the filing, the Grayscale Bitcoin Mini Trust, with the ticker symbol $BTC, will have a lower fee and come from a spinoff from the Grayscale Bitcoin Trust (GBTC).
Grayscale is one of the issuers of the ten spot Bitcoin ETFs currently in the market. The asset manager initially launched GBTC in 2013 as a trust fund available only in over-the-counter markets after the SEC rejected its proposal to release the product as an ETF.
Grayscale Unveils Mini Bitcoin ETF
Following GBTC’s conversion into an ETF in January, Grayscale has charged a management fee of 1.5%, much higher than other funds, including BlackRock’s IBIT and Fidelity’s FBTC. The high fees propelled the mass exodus of investors from GBTC, resulting in outflows exceeding $11 billion and BTC holdings falling 30%.
Although Grayscale is yet to disclose the management fee of the new mini spot Bitcoin ETF, the firm intends to charge an amount lower than that of GBTC and fair enough to compete with other products. Upon regulatory approval, a to-be-determined amount of the BTC backing GBTC shares would be used to seed the new fund.
“Pending approval, we plan for this new ETF to launch with a materially lower fee. This would be net-positive for existing GBTC investors, who would benefit from a lower blended fee with the same exposure to Bitcoin, spanning ownership of shares of both $GBTC and $BTC,” the asset manager stated.
Helping Long-term GBTC Holders
Bloomberg analyst James Seyffart believes the spinoff mechanism would help long-term GBTC holders, especially the taxable ones who were stuck with potential capital gains tax. He sees $BTC as “a nice middle ground” between Grayscale trying not to diminish their revenue and helping GBTC users.
As for the $BTC ticker, Seyffart revealed Grayscale gained ownership of the symbol when the company acquired an equity stake in ClearShares, an investment advisory firm that once changed their bond ETF symbol to the ticker.
Meanwhile, Grayscale’s proposal to launch $BTC comes as bitcoin smashed its all-time high to record a new peak of $73,000.