March 27, 2024
Bitcoin ETF

Grayscale Seeks Approval for Mini Bitcoin Trust ETF

The world’s largest digital currency asset manager, Grayscale, has made a big step in the cryptocurrency market by filing for a new “mini” version of its Grayscale Bitcoin Trust (GBTC) exchange-traded fund (ETF). The company submitted an S-1 form to the United States Securities and Exchange Commission (SEC) on March 11 to seek approval for the new offering under the ticker symbol “BTC”.

The proposed Grayscale Bitcoin Mini Trust is designed to provide investors with tax-efficient exposure to Bitcoin. The trust would operate independently of Grayscale’s main GBTC fund and is intended to offer GBTC shareholders a way to access Bitcoin exposure without incurring taxes. According to the filing, existing GBTC shareholders would receive shares of the new trust, with GBTC contributing an undisclosed amount of Bitcoin to the new entity.

“There is no fee disclosed yet or what % of $GBTC will spin off but pretty sure this will be a non-taxable event for a chunk of those shares to get into a cheaper and cost-competitive product.”

Bloomberg ETF analyst James Seyffart commented on the development, highlighting the potential benefits for investors

ETFs Shine Amid Cryptocurrency Surge

The filing comes at a time when the cryptocurrency market is experiencing significant growth. On March 11, Bitcoin reached a new all-time high of $71,415, while Ether breached the $4,000 mark for the first time since December 2021. In response to the surging interest in digital assets, asset manager VanEck announced a reduction in sponsor fees to zero for the first $1.5 billion of funds in its Bitcoin Trust ETF until March 31, 2025.

Despite the success of Bitcoin-based ETFs, the outlook for Ether-based ETFs remains uncertain. The SEC’s lack of communication with issuers has raised doubts about the possibility of approval by May.

“The main thing is the fact that we’re 73 days from the final deadline, and there’s been no contact or comments from the SEC to the issuers. That’s not a good sign.”

Senior Bloomberg ETF analyst Eric Balchunas statement

The cryptocurrency market continues to evolve rapidly, with ETFs playing an increasingly prominent role in providing investors with access to digital assets.

Image by Miloslav Hamřík from Pixabay

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