Grayscale's Planned Mini Bitcoin ETF Will Have a 0.15% Fee, the Lowest Among Spot Bitcoin ETFs

• Grayscale’s new ETF product, the Bitcoin Mini Trust, has set fees at 0.15%.
• Grayscale said it will contribute 10% of Grayscale Bitcoin Trust (GBTC) assets to the Bitcoin Mini Trust BTC$66,944.44.

Grayscale, which currently offers the highest-cost spot bitcoin ETF, revealed that a planned spinoff version of the fund will have a 0.15% fee, which would be the lowest of them all, according to pro forma financials in its latest filing.

The existing Grayscale Bitcoin Trust (GBTC) has a 1.5% fee. When Grayscale's Bitcoin Mini Trust BTC$66,944.44 is introduced, the filing says the company will contribute 10% of the assets in GBTC to the BTC Trust. Shares of the BTC trust are to be issued and distributed automatically to holders of GBTC shares. (The pro forma financial statements are projections of future expenses and revenues, based on a company's past experience and future plans.)

Grayscale’s Bitcoin Mini Trust was conceived to offer GBTC investors a lower fee option that’s more competitively in line with other bitcoin ETFs approved back in January. Currently, the Franklin Bitcoin ETF (EZBC) at 0.19% is the lowest-cost spot bitcoin ETF.

The Grayscale spinoff is also considered a non-taxable event for GBTC’s existing shareholders, so those investors will not be expected to pay capital-gains tax to automatically transfer into the new fund. Some early stage GBTC investors with gains in the thousands of percentages would face a significant taxable event to switch to a competitor product with a lower fee.

Grayscale’s GBTC appeared over a decade ago, originally offered through a private placement. In mid-2015, the shares began trading publicly on an over-the-counter basis. This continued until January 2024 when GBTC uplisted to NYSE Arca as a spot bitcoin ETF, along with competition products from other companies including BlackRock and Fidelity.

Grayscale’s current assets under management stands at around $19.6 billion; its nearest rival, which is BlackRock’s IBIT fund, has grown to just over $17.5 billion.

CORRECTION (April 20, 2024, 20:44 UTC): Removes reference to the number of bitcoin that would be moved from GBTC to the new fund.