YEREVAN (CoinChapter.com) — Grayscale Investments, a New York-based investment management firm, has announced Bitcoin Mini Trust ($BTC), an investment vehicle alternative to Its namesake trust-turned-ETF called GBTC. The firm noted that $BTC would have a lower fee structure than GBTC, which manages over $28 billion worth of assets.
Grayscale’s Bitcoin Mini Trust announcement appears in response to its investors complaining about GBTC’s higher fee structure, Eric Balchunas, a senior ETF analyst at Bloomberg, argued in an interview with Fortune.
Right now, people with money in GBTC don’t want to leave because they would have to pay capital gains taxes. They are paying 1.5% fees, which is a lot compared to other funds that ask for 0.25% or even less. For instance, VanEck has just announced it would not charge any fees on its Bitcoin ETF product.
Nate Geraci, who leads the ETF Store, said in an email to Fortune, “Grayscale is making a clever move. They are keeping GBTC popular among traders. At the same time, they are attracting long-term investors with the new mini trust.”
“If you have already invested in GBTC, you will join the new trust without doing anything. You will also pay less in fees for some of your shares. And you won’t have to pay taxes for moving your money to the new fund.”
Balchunas thinks Grayscale’s mini trust now has a good chance to attract new investors, atop the old ones. Furthermore, he noted that the firm should have started the Bitcoin Mini Trust earlier.
Terrence Yang, from Swan Bitcoin, said that low fees might make the new trust a strong player in the ETF competition. But he also said, “BlackRock and Fidelity are ahead in this race. It’s theirs to lose as they are moving ahead of everyone else.”
Grayscale CEO Michael Sonnenshein said the plan for selling securities is not final yet and could change. “We must wait for the SEC to approve our registration statement before we can sell anything,” he added.
Why doesn’t Grayscale reduce the fees for its GBTC fund?
Dave Nadig from VettaFi, who looks at future financial trends, said, “Yes, they could lower the fees. But they would lose at least $100 million by the end of the year. That’s hard to justify.”
Investors are investing a lot of money into Bitcoin ETFs. Nine funds have received about $9.6 billion. BlackRock and Fidelity have received most of this money, around 80%. But GBTC is losing money. It has lost about $10.5 billion.
These funds have made it easy for people and those with retirement accounts to invest in Bitcoin. They don’t have to buy it from a crypto exchange or handle complex digital wallets. Last week, these funds got a record $2.24 billion. As of Monday, they have a total of $55 billion in just two months.
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