Grayscale plans to launch a new bitcoin ETF Grayscale Bitcoin Mini Trust, an innovative move aimed at revitalizing its flagship Grayscale Bitcoin Trust GBTC fund amid recent financial troubles.
What happened: the company filed an S-1 on Tuesday, revealing plans to launch a new fund under the ticker 'BTC' as a strategic 'spin-off' from GBTC.
Under the scheme, a portion of GBTC's #bitcoin assets will be transferred to the new mini trust, and GBTC shareholders will receive an equal number of #BTC shares in return.
The company has assured stakeholders that the spin-off will not result in any tax liability for either GBTC or its shareholders, and this was emphasized in a recent statement.
However, the exact amount of bitcoins that will be reallocated to the new fund and the management fee remain undisclosed, prompting speculation among industry analysts.
Bloomberg #ETF analyst James Seyfarth sees the move as a strategic attempt by Greyscale to offer current investors a more cost-effective tax-free product.
'It will definitely be a tax-free event for some stocks to get cheaper, more cost-competitive products,' Seyfarth said.
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Greyscale's GBTC has suffered significant outflows since converting to a spot bitcoin ETF on Jan. 11: investors redeemed 229,000 BTC worth of shares, and the fund has failed to attract net inflows since the conversion.
This trend contrasts with new entrants such as BlackRock and Fidelity, which have accumulated 204,000 BTC and 128,000 BTC, respectively, in a short period of time.
These "new 9" ETFs have collectively outperformed Greyscale in bitcoin, mainly due to a more attractive fee structure.
While competitors like BlackRock charge a modest 20-30 basis points management fee, Greyscale charges a higher fee of 1.5%, making the product less attractive to potential investors.
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