Kelvin Munene Murithi
Grayscale Investments has received the green light from the U. S. Securities and Exchange Commission (SEC) for its new product, the Grayscale Bitcoin Mini Trust.
Expected to open for investment next Wednesday, the fund is designed to offer investors a cheaper solution than the Grayscale Bitcoin Trust (GBTC).
SEC Approval for Grayscale’s Bitcoin Mini Trust ETF
According to Nate Geraci, the president of The ETF Store, the US SEC has given the green light to Grayscale’s Bitcoin mini trust, with the ticker BTC as the company prepares for its trading debut. Concurrently, the new fund will be a spin-off of the current GBTC in which GBTC will transfer a certain percentage of its bitcoin to the new trust.
Like the Grayscale Ethereum Mini Trust, the management fee of the Grayscale Bitcoin Mini Trust is also set at 15 basis points.
Grayscale Bitcoin Mini Trust 19b-4 has been APPROVED…
Spinoff from GBTC set to happen next Wednesday (date of record is Tuesday).
Will be lowest cost spot bitcoin ETF at 15bps. pic.twitter.com/opFrSAENFu
— Nate Geraci (@NateGeraci) July 26, 2024
This initiative is expected to distribute new shares of the mini-trust to GBTC shareholders. The SEC has said that this step is aimed at preventing pricing manipulation and increasing market transparency and orderliness for the shares of the trust.
Regulatory Steps and Anticipated Launch
Grayscale is still waiting for the BTC Trust’s registration statement on the Form S-1 to become effective. This statement is very critical for legal and regulatory issues, which enables the trust’s shares to be offered to the public.
This means that the market is still waiting for this final process of the regulation to be completed.
The record date for the initial distribution of the Bitcoin Mini Trust shares is established for Tuesday, July 30, 2024, with the distribution expected to occur the following day. Each shareholder of record of GBTC as of the close of business on the record date will receive a one-for-one distribution of new shares in the Bitcoin Mini Trust.
Strategic Reduction in Fees and Market Impact
Due to the competitive pressures and the feedback from the investors regarding the fee structures, the upcoming Grayscale Bitcoin Mini Trust will have its fee at just 15 basis points.
This adjustment makes Grayscale to be more competitive as compared to other low-cost ETFs like those from Franklin Templeton Digital Holdings Trust and the Bitwise Bitcoin ETF whose fees are approximately 0.19% and 0.2% respectively.
The reduction in fee is considered as a strategic long-term plan of attracting more investors and cementing its position in the competitive and fast growing ETF industry especially in the current environment where there is increasing adoption of digital assets.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
