Grayscale files plans for ‘mini’ bitcoin fund, two months after GBTC’s conversion to ETF

United States

Grayscale Investments is planning a second exchange-traded fund tracking spot bitcoin prices, just two months after the firm’s flagship Grayscale Bitcoin Trust converted to an ETF, according to a regulatory filing. 

The Grayscale Bitcoin Mini Trust will trade under the ticker “BTC,” according to a filing Tuesday with the Securities and Exchange Commission. The firm has proposed spinning off part of its large Grayscale Bitcoin Trust GBTC, which trades under the symbol “GBTC,” to seed the new ETF, the filing shows.

The “mini” bitcoin ETF’s fees were not disclosed in the SEC document.

Mini versions of large funds elsewhere in the ETF industry charge lower fees than their flagship versions, as they aim to appeal to buy-and-hold investors rather than big institutions. The Grayscale Bitcoin Trust has seen billions of dollars in outflows since its conversion to an ETF on Jan. 11, the same day that less expensive spot bitcoin ETFs also began trading.

Rival funds with lower costs than the Grayscale Bitcoin Trust’s 1.5% expense ratio have been attracting assets, including ETFs managed by BlackRock and Fidelity. 

See: BlackRock, Fidelity together rake in more spot bitcoin ETF inflows than Grayscale is losing

The popular Invesco QQQ Trust Series I QQQ, which tracks the Nasdaq-100 index, is an example of an exchange-traded fund that trades alongside a smaller, cheaper version of itself.

Institutional investors may turn to large, liquid ETFs such as the Invesco QQQ Trust Series I, which has around $ 252 billion of assets, to actively trade. But the fund is more expensive than the smaller Invesco Nasdaq 100 ETF QQQM, which has about $ 22 billion of assets, FactSet data show.

Spot bitcoin ETFs, which aim to track the price of the volatile cryptocurrency, are surging this year.

BlackRock’s iShares Bitcoin Trust IBIT has climbed 53% since it listed on Jan. 11, while the Fidelity Wise Origin Bitcoin Fund FBTC has gained 52.9%, according to FactSet data through Tuesday. The Grayscale Bitcoin Trust — the largest ETF tracking spot bitcoin prices, with more than $ 27 billion in assets — has risen 56.5% over the same period, FactSet data show.

Bitcoin BTCUSD, +1.68% was trading around $ 71,023 on Tuesday evening, according to CoinDesk prices, at last check.

“At Grayscale, we aim to continually provide our investors with compelling, future-forward opportunities to access Bitcoin and the crypto ecosystem,” a spokesperson for Grayscale said in an emailed statement Tuesday. 

Grayscale is also aiming to launch a Grayscale Bitcoin Trust Covered Call ETF, according to a document filed with the SEC in January.