The bitcoin ETF market has entered a new phase of intense competition as asset managers and issuers strive to attract clients and expand their assets under management (AUM).
Amid this fee war, digital asset manager Grayscale Investments has announced that it is considering a spin-off of its bitcoin exchange-traded fund (ETF), the Grayscale bitcoin Trust (GBTC). Lagging its peers in recent months, GBTC's higher fees have been a major factor driving investors toward rival ETFs, according to a Reuters report. report.
Grayscale's GBTC faces $11 billion exodus as rivals attract billions
Since January, GBTC has witnessed capital outflows worth $11.05 billion, as reported by cryptocurrency research firm BitMEX Research. This occurred even when the price of btc reached a its highest point (ATH) and competing funds experienced capital inflows during the same period.
To execute the spin-off, Grayscale has btc-Mini-S-1-2024-03-11.pdf?rlkey=qh0h83u6vqzrkyelksrqg0gk4&e=1&dl=0″ target=”_blank” rel=”noopener nofollow”>archived to list shares of a new investment product called “Grayscale bitcoin Mini Trust”. Under this agreement, a certain amount of bitcoin held by GBTC will be transferred to the Mini Trust, while existing shareholders of GBTC will receive shares of the Mini Trust.
However the fee The Mini Trust's fees have not yet been determined, as indicated in the presentation. Following the spin-off, both GBTC and Mini Trust will operate independently.
The victory of grayscale A legal battle with the Securities and Exchange Commission (SEC) resulted in the approval of spot bitcoin ETFs in January. Competitors such as BlackRock's iShares bitcoin ETF and Fidelity Wise Origin bitcoin Fund have since recorded substantial inflows of $10.59 billion and $6.37 billion, respectively.
VanEck Zero Fee bitcoin ETF
In a similar move, asset manager VanEck has temporarily reduced the management fee to zero for its bitcoin Spot ETF, HODL, as its assets have lagged behind its competitors.
In a recent mail On social media platform
The asset manager clarified that if the Trust's assets exceed $1.5 billion within the aforementioned time frame, a 0.20% sponsor fee will be charged on assets above that threshold. This revised fee structure applies uniformly to all investors.
According According to Bloomberg ETF expert Eric Balchunas, VanEck's fee waiver announcement has already yielded significant results, with its HODL ETF seeing a record inflow of $119 million.
This notable increase, combined with significant inflows of $1 billion the previous day, has surpassed the outflows experienced by GBTC, which amounted to $494 million. Collectively, the assets of the ten bitcoin ETFs are on the brink of bankruptcy. reaching 60 billion dollars.
Overall, the current fee competition in the bitcoin ETF market, exemplified by Grayscale's contemplated spinoff and VanEck's fee reduction, underscores the industry's determination to attract investors and optimize its offerings.
As the battle for dominance in the digital asset space continues, market participants and investors are eagerly awaiting new developments in the changing landscape of cryptocurrency investment vehicles.
bitcoin, the leading cryptocurrency, is trading at $72,200, slightly below its recent ATH of $72,600 set on Monday. Over the past 30 days, btc has seen a consistent upward trend, resulting in a notable gain of almost 50%. So far this year, the cryptocurrency is up an impressive 254%.
Featured image from Shutterstock, chart from TradingView.com
