Grayscale Investments has announced that its upcoming “mini” version of the Grayscale Bitcoin Trust (GBTC) exchange-traded fund (ETF) will have fees nearly one-tenth lower than the current GBTC fees, making it the most cost-effective option among the approved spot Bitcoin ETFs.
However, Bloomberg analyst Eric Balchunas cautions investors not to get too excited just yet. In a post on X, he explains that these fees are hypothetical and subject to change before the launch. The purpose of announcing the fees at this stage is to attract investors’ attention. Balchunas acknowledges that it is a positive sign that Grayscale has chosen a fee of 15 basis points (bps).
According to a recent filing with the United States Securities and Exchange Commission (SEC), Grayscale has proposed a fee of 0.15% for its new Grayscale Bitcoin Mini Trust (BTC), which is one-tenth of the current 1.5% fee for GBTC. This fee would position Grayscale’s ETF with the lowest fees among the 11 approved spot Bitcoin ETFs introduced in January. Franklin Templeton, a trillion-dollar asset manager, follows closely behind with a fee of 0.19%. The Bitwise Bitcoin ETF (BITB) and VanEck Bitcoin Trust (HODL) have fees of 0.20%.
Thomas Fahrer, CEO of crypto-focused reviews portal Apollo, explains that Grayscale’s decision to offer lower fees is necessary to address the significant outflows from GBTC. Since its launch, GBTC has lost 315,000 BTC in outflows. Fahrer believes that offering cheaper alternative fees is a way for Grayscale to plug the leak.
Investors have been withdrawing funds from GBTC since the introduction of spot Bitcoin ETFs in January, as these ETFs offer more competitive fees for Bitcoin exposure. Since January 11, GBTC has experienced approximately $16.73 billion in outflows.
In related news, the shares of the new Bitcoin trust will be distributed to existing GBTC shareholders, and GBTC will also contribute an undisclosed amount of Bitcoin to the new trust.