Grayscale Bitcoin Mini Trust Is Proposed With 0.3% Fee To Compete With Other Funds

Key Points:

• Grayscale plans to launch the Grayscale Bitcoin Mini Trust fund with lower fees than its existing GBTC fund.
• GBTC shareholders will receive shares in the new fund, enabling them to maintain exposure to both GBTC and BTC without incurring taxable events.
• The move comes as investors withdraw billions from GBTC due to its high annual fee of 1.5%.

Grayscale, a major player in the cryptocurrency investment realm with its $28 billion GBTC Bitcoin exchange-traded fund (ETF), is set to diversify its offerings.

Read more: Grayscale Spot ETF: Basic Knowledge and Positive Future Outlook

Low-Fee Grayscale Bitcoin Mini Trust Fund Unveiled

The company aims to introduce a more cost-effective alternative to its current flagship fund. In a filing made public on Tuesday, Grayscale disclosed its intentions to create the Grayscale Bitcoin Mini Trust (BTC), seeking approval from the U.S. Securities and Exchange Commission (SEC).

The proposed Grayscale Bitcoin Mini Trust will operate with significantly lower fees compared to the existing GBTC fund. Grayscale plans to allocate a portion of Bitcoin from its GBTC reserves to seed the new product. Shareholders of the GBTC will then receive shares in the new fund, enabling them to maintain exposure to both GBTC and BTC without incurring taxable events.

As investors have been withdrawing funds from GBTC, amounting to over $11 billion so far this year, Grayscale’s move to launch a cheaper alternative appears strategic. The outflows from GBTC have been attributed to its comparatively high annual fee of 1.5%, prompting investors to seek more economical options in the market.

Grayscale’s Response to GBTC Outflows

Although specific fee details for the BTC fund have not been disclosed, insiders suggest they will be lower than those of GBTC. This move aligns with a broader trend in the ETF industry, where issuers are introducing cost-efficient alternatives to attract investors.

Grayscale’s decision to expand its ETF offerings comes amid mounting competition and criticisms over its fee structure. By diversifying its product line, Grayscale aims to stay competitive in the market and attract a broader investor base without triggering taxable events for existing shareholders.

Recently, Grayscale also introduced a new fund, the Grayscale Dynamic Income Fund (GDIF), which stakes cryptocurrencies to generate income.