Grayscale announces Bitcoin ETF spinoff plans
In the year On July 19, crypto asset manager Grayscale announced plans to spin off a portion of its flagship Bitcoin fund, Grayscale Bitcoin Trust (GBTC), into a new exchange-traded fund (ETF).
On July 31st, Grayscale will contribute 10% of its holdings in GTBC in Bitcoin (BTC) to a new ETF, Grayscale Bitcoin Mini Trust (BTC). The company said the ETF is ready to start trading on the New York Stock Exchange (NYSE) Arca Exchange, pending final regulatory approval.
Existing GBTC shareholders will receive shares in the mini-trust in direct proportion to their shares in GBTC. As a result of the wire, GBTC holders will hold the same amount as BTC before, but in two different currencies.
“[F]From a value perspective — say a theoretical person has $1,000 in ETHE or GBTC. After the spin-offs, it should be $900 in the original fund and $100 in the new mini ETF, Bloomberg ETF analyst James Seifert said in a post on the X forum.
On July 8, Greyscale announced a similar move with the Greyscale Ethereum Trust (ETHE) ETF, with existing ETHE shareholders receiving a proportional distribution of shares in the new Greyscale Ethereum Mini Trust (ETH).
The spinoff was a win-win for current ETHE holders as the MiniTrust management fees are a fraction of what ETHE costs. Small Trust charges 0.15% fees compared to 2.5% for ETHE. Fees are calculated as a percentage of the fund's total assets under management.
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Grayscale did not disclose management fees for the BTC Mini Trust, but industry analysts expect a broadly similar discount to GBTC, which currently charges investors a 1.5% annual management fee.
The Greyscale GBTC and ETHE funds are one of the longest running BTC and Ethereum funds in the United States, launched in 2013 and 2017 respectively. The GBTC fund holds more than $17 billion in assets.
According to a person familiar with the matter, the distribution will be given to existing shareholders out of the tax fund and into the new exchange-traded fund.
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