Grayscale Announces Low-Cost Mini Bitcoin ETF, Setting Industry Benchmark with 0.15% Fee
Grayscale has recently unveiled plans for a pioneering Mini Bitcoin ETF that will feature the lowest expense ratio in the spot Bitcoin ETF category, at only 0.15%. This new offering aims to significantly reduce the expense burden for investors by allocating 10% of GBTC assets to the BTC Trust. This strategic move not only enhances Grayscale’s competitive edge but also provides tax-free benefits to existing shareholders who will automatically transition to the new fund, potentially diverting interest from higher-cost competitors.
Currently, Grayscale’s existing Bitcoin Trust, GBTC, charges a 1.5% fee. With the rollout of the new Bitcoin Mini Trust, BTCUSD, the company has committed to transferring 10% of the assets from GBTC to the BTC Trust. Shares of the BTC Trust will be automatically issued to GBTC shareholders, as detailed in the financial statements prepared based on past experiences and future projections.
This initiative positions the Grayscale Bitcoin Mini Trust as a more affordable alternative for GBTC investors compared to other Bitcoin ETFs approved earlier this year. For instance, the Franklin Bitcoin ETF, EEZBC, currently holds the spot for the lowest-cost Bitcoin ETF with a fee of 0.19%.
The restructuring of Grayscale into this new fund is considered a tax-free event for existing GBTC shareholders, allowing them to transition without incurring capital gains taxes. This is particularly beneficial for early GBTC investors, whose returns could potentially reach thousands of percent, who now face significant taxable events should they choose to invest in alternative products with lower fees.
Grayscale’s GBTC was initially launched over a decade ago as a private placement and began publicly trading over-the-counter mid-2015. This continued until January 2024 when GBTC transitioned to a spot Bitcoin ETF, alongside competitors such as BlackRock and Fidelity’s products on the NYSE Arca.
Grayscale currently manages approximately $19.6 billion in assets, surpassing its closest competitor, BlackRock’s IBIT fund, which has grown slightly over $17.5 billion. This development underscores Grayscale’s commitment to innovation and investor satisfaction in the rapidly evolving cryptocurrency investment landscape.
