Crypto asset manager Grayscale Investments announced its plan to create a new exchange-traded fund (ETF) by spinning off 10% of its Grayscale Bitcoin Trust (GBTC).
This new fund, Grayscale Bitcoin Mini Trust (BTC), is set to begin trading on the NYSE Arca exchange by July 31, pending regulatory approval.
According to the announcement, Grayscale will transfer 10% of the Bitcoin held by GBTC to the new Mini Trust ETF. Existing GBTC shareholders will receive proportional shares in the Mini Trust, so they will keep their overall Bitcoin exposure through both funds.
This move follows a similar strategy Grayscale employed with its Ethereum Trust earlier this month, where it created the Grayscale Ethereum Mini Trust.
Bloomberg ETF Analyst James Seyffart anticipates that the management fees for the Bitcoin Mini Trust will be much lower than GBTC’s current 1.5% annual fee. This expectation is based on the lower fee of 0.15% for the new Ethereum Mini Trust compared to its predecessor’s 2.5% fee.
Seyffart explained the potential impact on investors: “From a value point of view — say a theoretical person has $1,000 in ETHE or GBTC. After the spinoffs occur, it should essentially be $900 in the original fund and $100 in the new mini ETFs.” This shows how the spin-off helps maintain an investor’s exposure while potentially lowering their fee costs.
GBTC is one of the longest-running spot Bitcoin funds in the U.S., with its Ethereum counterpart starting in 2017. GBTC was launched in 2013 and manages over $17 billion in assets.
Also Read: BlackRock’s Bitcoin ETF Records $260M Inflows on July 16
