Grayscale’s Bitcoin Mini Trust Debuts With Record-Low Fees – Details

The Grayscale Bitcoin Mini Trust (the “Trust”) officially launched on Wednesday after receiving approval from the US Securities and Exchange Commission (SEC), emerging as a lower-cost alternative to the renowned Grayscale Bitcoin Trust (GBTC).

New Bitcoin Mini Trust Debuts

According to Bloomberg, the Grayscale Bitcoin Mini Trust, which debuted with a 0.15% expense ratio, is the lowest-cost exchange-traded product holding Bitcoin in the US market, edging out even the recently launched Bitcoin ETFs from industry giants like BlackRock and Fidelity.

The new mini-trust is being seeded with 10% of the assets from Grayscale’s largest fund the GBTC, which converted to an ETF structure in January 2023 after over a decade as a closed-end investment product.

Zach Pandl, head of research at Grayscale, told Bloomberg:

The timing is also excellent for investors. We have a Federal Reserve that is about to cut rates. Crypto has become an important topic in the US presidential election. The Trump platform may favor a dollar weakness, which could have implications for investors’ portfolios.

According to the report, existing GBTC investors will automatically receive shares of the mini-trust on a pro-rata basis, further providing them with exposure to the lower-cost option.

The launch of the Grayscale Mini Trust comes amid a wave of Bitcoin and Ethereum ETF approvals in the US market this year, signalling a new era for crypto investing in the country despite intense regulatory crackdown from regulators that have targeted key industry players such as Binance, Coinbase, Uniswap Labs and Ripple. 

However, the issuers of the Bitcoin ETFs approved in January have aggressively competed on fees, with some offering zero-fee products temporarily to attract assets. 

This has resulted in the Grayscale Bitcoin Trust becoming the second-largest BTC fund behind BlackRock’s iShares Bitcoin Trust, which has accumulated $20 billion in total assets since its US listing in January. 

On the other hand, the GBTC has seen nearly $19 billion in outflows since it transitioned to an ETF structure and began trading earlier this year, along with other eight ETFs on the market.

Ethereum ETF Battle Heats Up

The crypto ETF landscape has expanded beyond just Bitcoin, with the SEC also approving a slew of spot Ethereum funds in July. These nine US Ethereum ETFs saw a combined $33.67 million in net inflows on Tuesday, ending a four-day streak of outflows.

Meanwhile, the Grayscale Ethereum Trust (ETHE) was the only spot Ether ETF to see negative flows, losing $120.28 million. This was compensated by strong inflows into products such as BlackRock’s ETHA, which saw $117.98 million in net new assets.

Grayscale has also launched the lower-fee Ethereum Mini Trust (GEMP), which has attracted $181 million in net inflows, while $1.8 billion has exited the higher-fee Grayscale Ethereum Trust.

At the time of writing, the largest cryptocurrency on the market continues its consolidation price action, trading at $66,660, which represents no change from Tuesday’s price. 

Featured image from DALL-E, chart from TradingView.com