rayscale Investments, the largest digital currency asset manager, announced plans to establish a new investment product called the "Grayscale Bitcoin Mini Trust" through a proposed spin-off of its flagship Bitcoin fund GBTC. Regulatory filings revealed Grayscale intends to transfer a portion of Bitcoin held by GBTC to the new Mini Trust. Existing GBTC shareholders will receive shares in the Mini Trust following the proposed restructuring. The fees for the Mini Trust have yet to be disclosed.
VanEck's Zero-Fee Gambit
In another move demonstrating the intensifying competition, VanEck slashed fees on its Bitcoin ETF HODL to zero until March 2025. If the fund tops $1.5 billion in assets during this period, a 0.20% sponsor fee will apply to only the amount above the threshold. VanEck hopes eliminating fees will help its ETF catch up after experiencing outflows compared to rivals securing billions in recent inflows. Early data suggests the strategy is working, with HODL seeing record net inflows of $119 million following the announcement.
Grayscale Bleeds Billions as Rivals Surge
Since January, GBTC has lost a staggering $11 billion in assets while competitors attracted billions from investors. With Bitcoin hitting new all-time highs, the higher 0.96% fee charged by GBTC has disadvantaged it against BlackRock's iShares Bitcoin ETF and Fidelity's Wise Origin Bitcoin ETF, which levy 0.75% and 0.0% fees, respectively. Total holdings across all ten Bitcoin ETFs near $60 billion and continue scaling new peaks, demonstrating robust investor demand...
A Bitter Battle
The fee competition underscores the determination among providers to dominate the booming cryptocurrency investment industry. With billions at stake, Grayscale and VanEck have launched aggressive maneuvers aimed at clawing back lost market share. Investors ultimately benefit from lower costs and better-performing funds in this bitter battle. Whether Grayscale's gambit or VanEck's zero-fee lure succeeds remains to be seen, but one thing is clear - the ETF fee wars are just getting started...
Bitcoin Price Update
Meanwhile, the price of Bitcoin remains in an uptrend. After hitting a new all-time high of $72,600 days ago, Bitcoin has consolidated around $72,000. With strong gains of 50% over the past month and 254% year-to-date, the leading cryptocurrency shows no signs of slowing in its bull run. Where the price heads next will also influence the flow of assets into competing ETF products.
