It’s premature to get thrilled, according to Bloomberg ETF expert Eric Balchunas, even though Grayscale’s new Mini Bitcoin ETF will be around ten times less expensive than GBTC’s costs.
The most affordable choice among the authorised spot Bitcoin ETFs is Grayscale Investments’ planned “mini” version of the Grayscale Bitcoin Trust (GBTC) exchange-traded fund (ETF), which will be nearly 10 times less expensive than the GBTC fees as they stand today. Eric Balchunas, a Bloomberg analyst, cautions investors against getting too optimistic just soon.
In a post on April 20, Balchunas stated, “This is pro-forma financials and as such hypothetical,” adding that although adjustments might be made before to launch, the fees were meant to draw in investors.
He commented, “The good news is they had to choose a number for this and knew people would be watching. They decided on 15bps.”
According to a recent filing with the US Securities and Exchange Commission (SEC), Grayscale has requested fees for its new Grayscale Bitcoin Mini Trust (BTC) to be set at one-tenth of the current 1.5% cost for GBTC.
It is positioning its ETF to have the lowest fees among the 11 authorised spot Bitcoin ETFs launched in January, with a suggested fee of 0.15%. Trillion-dollar asset manager Franklin Templeton is the closest competitor, with a suggested fee of 0.19%. At 0.20%, the Bitwise Bitcoin ETF (BITB) and VanEck Bitcoin Trust (HODL) trail closely behind.
In a post dated April 21, Thomas Fahrer, the CEO of the crypto-focused reviews platform Apollo, informed his 42,900 X followers that Grayscale “offering cheap” alternative fees was required to make up for the significant outflows of GBTC.
“Grayscale needed to plug the leak because they lost 315K BTC in outflows since launch,” he stated.
Following the introduction of spot Bitcoin ETFs in January, which provide a more appealing fee for Bitcoin exposure, a large number of investors have been withdrawing money from the GBTC product.
According to Farside data, since spot Bitcoin ETFs were launched on January 11, there have been over $16.73 billion in withdrawals from GBTC. According to a recent rumour, existing GBTC stockholders would receive shares of the new Bitcoin trust, since GBTC will also be contributing an undisclosed quantity of Bitcoin to the new trust.