Grayscale Seeks SEC Approval for Bitcoin Mini Trust

Grayscale has recently filed with the SEC seeking approval for a Bitcoin Mini Trust, aiming to offer a more cost-effective option compared to its existing $28 billion GBTC spot Bitcoin ETF. The company plans to fund this new offering by reallocating a portion of shares from its GBTC ETF.

The introduction of the Grayscale Bitcoin Mini Trust is expected to lower aggregate fees for current GBTC investors, providing a reduction in expenses without the burden of capital gains tax when transitioning to the new fund. This proposal is significant as it addresses the critical factor of avoiding capital gains tax that has kept investors attached to GBTC despite its higher fees compared to competitors.

Grayscale has submitted a Form S-1 for the new spot Bitcoin ETF, named Grayscale Bitcoin Mini Trust, to the U.S. Securities and Exchange Commission. Once approved, the ticker symbol for this product will be $BTC.

While the specific fee structure for the new mini trust is yet to be announced, industry insiders suggest it will be competitive, positioning it as an attractive alternative among existing Bitcoin ETF offerings.

Despite GBTC’s higher fee rate of 1.5%, it has maintained dominance in the market, even after transitioning from a closed-end fund to an ETF. This contrasts with competitors like Franklin Templeton Digital Holdings Trust (EZBC) and Bitwise Bitcoin ETF (BITB), which charge lower fees of 0.19% and 0.2%, respectively.

The launch of standard and mini versions of ETFs in the industry aims to cater to a wider range of investor preferences and financial capabilities.

Although GBTC experienced significant outflows of over $10 billion following the approval of several spot Bitcoin ETFs earlier in the year, the fund’s value has remained stable. This stability is primarily attributed to the bullish crypto market, which has offset the impact of these outflows.

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