Grayscale, the asset management firm behind the $28 billion GBTC Bitcoin ETF, has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) seeking to roll out a more affordable variant of its fund. The initiative intends to reallocate a share of GBTC’s assets to finance this new offering.
New Savings for Investors
The proposed Bitcoin Mini Trust would present GBTC investors with the opportunity to enjoy reduced fees. Moreover, investors could transition to the new fund without incurring capital gains taxes. This is particularly advantageous as the avoidance of these taxes is a significant factor tethering investors to the higher-fee GBTC.
Sources close to Grayscale suggest that the undisclosed fee structure of the new fund will be able to compete with the market’s most cost-efficient Bitcoin ETFs.
Competitive Pressure on Fees
Historically, Grayscale’s GBTC has been notable for its steep fees, at 1.5%, especially when compared to the 0.19% of Franklin Templeton Digital Holdings Trust and the 0.2% of Bitwise Bitcoin ETF. Nonetheless, GBTC has managed to preserve its asset value due to bullish market sentiments.
Despite the outflow of over $10 billion from GBTC since the spot Bitcoin ETF approval, fee structures continue to be a major consideration for investment advisors and brokers. A low-cost alternative from Grayscale could therefore strategically position the company to attract more clients. The new product, if approved, is set to trade on the NYSE Arca with the BTC ticker.