Grayscale plans to launch a spinoff Bitcoin ETF with lower fees

Grayscale, the firm that offers the spot bitcoin ETF GBTC with a 1.5% fee, has announced that a new spinoff version of the fund will be launched soon with a reduced fee of 0.15%. As per Grayscale’s latest filing, this new fee is expected to be the lowest among all the spot bitcoin ETFs available.

According to the filing, Grayscale will contribute 10% of the assets of GBTC to the new version named Grayscale’s Bitcoin Mini Trust (BTC). BTC is a non-taxable event for GBTC’s shareholders, so they won’t pay capital gains tax to transfer into the new fund.

The move could be seen as an act of desperation from Grayscale, the world’s largest crypto asset manager. The high fee of 1.5% on GBTC has prevented any inflows over the past month, while investors have poured money into other Bitcoin ETFs. With the introduction of Bitcoin Mini Trust (BTC), which has a 0.15% fee, Grayscale wants to regain popularity among investors. Franklin Bitcoin ETF (EZBC), with a cost of 0.19%, is currently the lowest-cost Bitcoin exchange-traded fund.

In the past two weeks, BlackRock $BLK’s iShares Bitcoin Trust, or IBIT, has seen an inflow of $15 billion, followed by Fidelity’s FBTC with $8 billion, ARK 21Shares’s Bitcoin ETF ARK with $2.2 billion, and Bitwise’s BITB with $1.7 billion, per Farside. However, because of GBTC’s outflows of $16.7 billion in the last two weeks, the efforts of other spot Bitcoin ETFs were overshadowed, resulting in a total net inflow of $12 billion, which could have been higher if GBTC had seen inflows.

Grayscale was one of the first companies to offer Bitcoin in a mutual fund-like product. However, this product was a topic of dispute with the Securities and Exchange Commission. After the SEC approved U.S.-listed ETFs tracking Bitcoin, the $27 billion Grayscale Bitcoin Trust converted into an ETF.