Correction: This article corrects the previous article on Grayscale's mini ETH ETF/mini BTC ETF.
This view is shared from an article by Bloomberg analyst James. I will paraphrase it based on my understanding.
1. Whether it is #ETH's mini ETF or BTC's mini ETF, neither of them directly replaces the original Grayscale ETF, but is a new derivative based on the original Grayscale ETF. In the currency circle, it can be understood as the relationship between the parent coin and the child coin.
2. If you want to get the mini ETF as soon as possible, you need to hold Grayscale's ETF before the specified time. At that time, it will be allocated to the mini ETF in proportion based on the user's position snapshot.
3. The BTC holdings snapshot is before July 31, and the ETH holdings snapshot is before July 18 (because this is the latest S-1 filing date for ETH ETF). After that, the product has been launched, and users who originally held Grayscale ETF positions can get the relevant mini ETFs in the first place.
4. The proportion of miniETFs. For example, if you originally hold 1,000 shares of Grayscale's GBTC or ETHE, then after the miniETF is listed, you can get the same number of mini ETFs in the same proportion of 1:1.
5. Value: The value of the new mini ETF is 10/1 of your original Grayscale holdings. For example, if you originally held 1 million Grayscale GBTC positions, you can get a miniETF worth 100,000.
6. If what James said is true, Grayscale’s low-fee mini ETF this time is not because the original ETF management fee is high and it chose to go the low-price internal circulation route, but because it chose to empower the original ETF.
7. MiniETF may be easier to understand in terms of the cryptocurrency circle. For some reason, the mother coin has a high unit price, poor liquidity, and a high market value, which causes many people to worry that it will not rise and choose to sell. At this time, Grayscale issues sub-coins to empower the mother coin. Holding a certain number of mother coins, one can obtain a certain proportion of sub-coins. The sub-coins have a low unit price and better liquidity. In this way, people who originally wanted to sell the mother coin choose not to sell it for the time being and continue to hold it for the time being.
8. Grayscale's move is a way to retain users by empowering the original ETF to reduce user churn. After all, the original Grayscale ETF management fee is indeed high, but once there is a new way to play and it is available for free, users can make profits in both directions (the original ETF rises/mini ETF rises). Such double profits naturally make up for users' concerns about selling Grayscale ETFs and switching to other companies due to concerns about high management fees.
9. Grayscale’s move may effectively reduce the selling pressure of ETH users after the listing of ETH ETF, and there should not be continuous net outflow like BTC. This is a good thing for the crypto market.
If you are interested in the original text, you can read James' original text
