Grayscale, a top crypto asset manager, said on July 19 that it was going to create a new exchange-traded fund (ETF) from a part of its main Bitcoin fund, the Grayscale Bitcoin Trust (GBTC).
On July 31, Grayscale will add 10% of the spot Bitcoin that GBTC holds to its new ETF, the Grayscale Bitcoin Mini Trust (BTC). The new ETF will start trading on the NYSE Arca exchange as soon as it gets final permission from regulators.
Shareholders in GBTC will get shares in the Mini Trust equal to the amount of shares they already own in GBTC. This means that people who own GBTC will keep the same amount of spot Bitcoin, but it will be split between two different funds.
Bitcoin ETF Spinoff Details
According to Bloomberg ETF Analyst James Seyffart on the X platform, if a person has $1,000 in ETHE or GBTC before the spinoffs, they should have $900 in the original fund and $100 in the new inadequate ETFs after the spinoffs.
On July 8, Grayscale said that its Grayscale Ethereum Trust (ETHE) would be making a similar move. People who already own ETHE will get shares in the new Grayscale Ethereum Mini Trust (ETH).
The spinoff will be beneficial for people who already own ETHE because the Mini Trust has much lower management fees (0.15% vs. 2.5% for ETHE). Fees are based on how much money the fund has under control.
Grayscale is yet to disclose how much the BTC Mini Trust will cost to run, but experts in the field think it will be less than GBTC’s current 1.5% annual management fee.
The GBTC and ETHE funds, which were started by Grayscale in 2013 and 2017, are two of the oldest spot Bitcoin and Ethereum funds in the United States. More than $17 billion is in the GBTC fund.
A person who knows about the situation said that the distribution gives current owners a tax-friendly way to switch from the old fund to the new ETF.
