Grayscale Investments has announced that its upcoming “mini” version of the Grayscale Bitcoin Trust (GBTC) exchange-traded fund (ETF) will have fees nearly one-tenth lower than the current GBTC fees, making it the most cost-effective option among the approved spot Bitcoin ETFs.
However, Bloomberg analyst Eric Balchunas advises investors not to get too excited just yet. In a post on X, Balchunas explains that these fees are hypothetical and subject to change before the launch. Nonetheless, the fees were deliberately set at 15 basis points to attract investors.
Grayscale has proposed a fee of 0.15% for its new Grayscale Bitcoin Mini Trust (BTC), which is one-tenth of the current 1.5% fee for GBTC. This places their ETF as the one with the lowest fees among the 11 approved spot Bitcoin ETFs introduced in January. Franklin Templeton, a trillion-dollar asset manager, closely follows with a fee of 0.19%. The Bitwise Bitcoin ETF and VanEck Bitcoin Trust both have fees of 0.20%.
Thomas Fahrer, CEO of crypto-focused reviews portal Apollo, explains that Grayscale’s decision to offer lower fees is a response to the significant outflows experienced by GBTC. Since its launch, GBTC has lost 315,000 BTC in outflows, prompting the need to address this issue.
Since the introduction of spot Bitcoin ETFs in January, many investors have been withdrawing funds from GBTC in favor of the more competitive fee structures offered by these ETFs. This has resulted in approximately $16.73 billion of outflows from GBTC.
In addition to reducing fees, Grayscale plans to distribute shares of the new Bitcoin trust to existing GBTC shareholders. GBTC will also contribute an undisclosed amount of Bitcoin to the new trust.
Overall, Grayscale’s decision to offer lower fees and address the outflows from GBTC reflects the evolving landscape of Bitcoin investment options and the need to remain competitive in the market.