On Tuesday, 12 March 2024, Grayscale Investments LLC announced that it had filed an S-1 request for a Grayscale Bitcoin Mini Trust with the US Securities and Exchange Commission (SEC). Bloomberg described this spin-off as a “clone” of the original spot Bitcoin exchange-traded fund (ETF).
Grayscale Files SEC Request for GBTC Spin-off
This investment manager, which currently has the world’s largest Bitcoin ETF, is seemingly initiating this fund to offset its losses against more cost-effective competitors. Although the Grayscale Bitcoin Mini Trust will have lower fees, it will not spark capital gains tax for Grayscale Bitcoin Trust (GBTC) investors.
Grayscale indicated that its current GBTC would seed this initiative and that GBTC investors would gain stock in this mini trust. According to Reuters, BitMEX Research indicated that GBTC experienced capital outflows of approximately $11bn since January 2024. This occurred in the wake of Bitcoin achieving unprecedented highs after the SEC’s approval of the spot-bitcoin ETFs by Grayscale and competitors such as BlackRock and Fidelity.
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Bitcoin closed Tuesday’s trading at $71,471.52 and continued its climb on Wednesday 13 March 2024. Reportedly, investors favour the investment manager’s competitors, which charge 0.3% on average instead of Grayscale’s 1.5% annual charge.
Bloomberg indicated that VanEck, for example, announced the waiver of its VanEck Bitcoin Trust (HODL) fees up to the first $1.5bn in assets until the end of March 2025. Grayscale still needs to list the fees for its mini trust, but those close to the matter expect it to be less than the GBTC fees.
