Grayscale launches a spin-off investment fund “Bitcoin Mini Trust” with the ticker BTC and offers a competitive fee of 0.15%

On March 12, 2024, Grayscale Investment LLC registered its new spot ETF “Bitcoin Mini Trust” with the Securities and Exchange Commission under the ticker “BTC” through the S-1 form.

According to the latest financial documentation emerged, this fund, which represents a spin-off of GBTC, will soon be listed on NYSE Arca with a fee of 0.15%.

This is the lowest commission in the Bitcoin ETFs market, contrasting with the 1.5% required by Grayscale to trade the main fund GBTC.

All the details below.

Grayscale and the new spot ETF “Bitcoin Mini Trust” (BTC): 0.15% fee compared to GBTC’s 1.5%

According to the latest document filed with the SEC, Grayscale will soon launch the new ETF “Bitcoin Mini Trust” on the NYSE Arca exchange under the ticker BTC, offering its investors a record fee of 0.15%.

This new product breaks away from GBTC as a spin-off, taking custody of some of its held BTC, while remaining under the management of Grayscale Investment.

It is expected that at launch Bitcoin Mini Trust will use 63,620 BTC as the underlying asset, which is 10% of the stake held by GBTC at the beginning of the year, now more than halved due to the continuous outflow from shareholders.

The decision to create a parallel fund by Grayscale is motivated by the recent exodus of clients from GBTC to embrace competitor funds such as IBIT, FBTC, and ARKB that offer significantly lower management fees.

Now, leaving aside discounts on fees and various incentives offered by different Fund Managers during the first months of trading since its launch in January, the new “BTC” fund by Grayscale will become the cheapest in the sector thanks to the competitive 0.15% fee.

Currently Franklin Bitcoin ETF (EZBC) at 0.19% is the bitcoin spot ETF with the lowest cost, while GBTC with a fee of 1.5% is the one with the highest cost.

It is worth noting how investors who want to move from GBTC to the new BTC fund will not incur a taxable event, so these investors will not be required to pay capital gains tax for the transition.

This detail could push many GBTC clients who want to expose themselves with lower costs to remain within the portfolio managed by Grayscale, as switching to other competitors would incur a taxable event.

According to the document filed with the SEC, the shares will be automatically distributed to the holders starting from the record date, which has yet to be disclosed.

Currently GBTC still represents the fund with the most Bitcoin in custody, equal to 304,335 units worth 19.2 billion dollars. In second place we find IBIT by BlackRock with 273,607 digital coins worth 17.3 billion dollars, while closing the podium is FBTC by Fidelity with 153,318 BTC worth 9.7 billion dollars.

If Bitcoin Mini Trust were created today, Bitcoin Mini Trust with the default allocation would be listed directly in fourth place in the ranking of funds with the most AUM ahead of Ark, Bitwise, VanEck, and Walkyrie.

Grayscale’s post-halving market analysis: this time it’s different

A few days ago Grayscale Research published a report on the post-halving market outlook, analyzing how this time the halving event of the new Bitcoin supply could affect the price of the BTC currency.

Grayscale starts by offering a vision that takes into account the importance of macroeconomic events and their effects on speculative markets, remembering that in all 3 previous halvings there has always been something to drive the appreciation of the cryptocurrency.

In 2012 the European debt crisis highlighted the potential of Bitcoin as an alternative store of value.

In 2016, the boom of ICO offers in the altcoin landscape also positively influenced BTC, bringing in 5.6 billion dollars into the market.

Finally in 2020, the COVID-19 pandemic and the expansive stimulus measures by central banks potentially pushed new buyers towards Bitcoin as a hedge.

According to Grayscale, it is important to understand that the price increase post-halving is not guaranteed, otherwise it would not explain why more rational investors do not buy the asset in advance before the halving occurs.

Anyway, it is interesting to observe how some details, detached from macroeconomic logic, suggest a potential exponential growth in price even in this moment.

First of all, the relentless growth of the hashrate and the positive financial situation of miners, who have prepared in advance for the halving by liquidating part of their on-chain reserves, bodes well for the future of the cryptographic asset.

It is also worth noting how the innovation of Ordinals inscriptions, and the very recent launch of Runes, have given an additional dimension of utility to Bitcoin, which goes from digital gold to something even greater and unexplored.

Since the birth of this innovative practice, more than 59 million assets have been generated on Bitcoin, bringing in over 200 million dollars in network fees.

Finally, Grayscale notes how the launch of spot ETFs in January was a particularly significant event for the price of BTC.

Thanks to the introduction of this new set of investment tools, the selling pressure on Bitcoin has significantly decreased in these first months, pushing the value of the asset upwards in a parallel context of growing demand.

The halving of the supply of new BTC, which will decrease from a block issuance of 6.25 coins to 3.125, will remove 7 billion dollars of sales from the market, combined with the presence of spot ETFs could give Bitcoin the necessary boost to face the post-halving challenge.