Grayscale mini ETF additional explanation - the currency circle currency's hair model "revised"
Last night I posted an interpretation of the Grayscale mini ETF, in which the tweet quoted the views and interpretation of Bloomberg analyst @JSeyff. I originally thought that everyone would read James' original text, so my explanation was not comprehensive enough and it did confuse many people. Today, several friends sent me private messages asking questions, so I will interpret it again.
The content of this article is not just an interpretation of James' content. I went back to look at the content introduction of the file submitted by Grayscale. I will leave a link for you at the end of the article. The following are the issues that everyone is more concerned about.
1. After the new mini ETF is issued, the number of Grayscale ETFs (such as GBTC) originally held will remain unchanged, but the value will change. After the mini ETF mentioned in the original article is issued, users who originally held GBTC can get a new mini ETF at a 1:1 ratio, and the total number of GTBCs originally held will not decrease.
2. Value change. If I hold 1,000 shares of GBTC, worth $59,000, then after the split, the quantity remains unchanged, but its value decreases by 10%, and this 10% of the value is directly transferred to the mini ETF.
3. To issue a new mini ETF, Grayscale will transfer 10% of the total value of BTC held by Grayscale itself to the new ETF. In this way, the original holding value will be reduced and the total value of GBTC will also be reduced by 10%. At the same time, because the new mini ETF is benchmarked against 10% of assets, the price will also be one-tenth of the original value of Grayscale GBTC. This is the initial price.
4. Therefore, Grayscale's miniETF is a way of expansion and empowerment, allowing people who originally held Grayscale ETF to have more chips without changing the total value. Because the original GBTC value of users who obtained miniETF decreased by 10%, and this part of the reduction was just compensated by miniETF, and users held twice the original number of shares.
5. Many people wonder whether the Grayscale mini ETF is really useful. In my opinion, it is very useful. The new ETF is a new way of playing, which has great benefits as follows:
① Product diversification, suitable for different groups, miniETF threshold will be lower
② Enhance market position, similar to using new gameplay to attract external traffic attention, marketing methods
③The new miniETF can attract more retail investors to buy, bringing Grayscale a better asset management scale
④ Better competition among peers. Instead of just relying on low-fee models, companies choose innovation to attract more users while locking in the turnover rate of their own users.
⑤ Improve liquidity, more chips, miniETF will inevitably bring better ETF to Grayscale's ETF.
⑥Tax rules: new products will have new tax mechanisms, which are expected to reduce taxes more effectively.
6. In my personal opinion, the new products launched by Grayscale will better slow down the outflow of ETH ETF after its listing, and even bring more retail traffic to Grayscale. Previously, Grayscale's ETF products had high management fees and higher investment thresholds. Now miniETFs are aimed at lower investment thresholds. If the market response is better, it will bring a certain amount of traffic back to Grayscale.
7. Another aspect that needs to be considered is that in the US investment ecosystem, the investment ability and awareness of many ordinary retail investors are not very high. Many people rely on family financial planners or financial institutions, and then use financial planners and institutions to pool funds for investment. For financial planners or institutions, the first consideration when choosing to invest in crypto ETF products is not management fees, but other factors.
Some of the above content is my subjective judgment. I am not a professional securities ETF researcher and do not provide investment advice.
