Grayscale, the company behind the popular Bitcoin ETF product GBTC, has revealed details about its new spin-off fund, the Bitcoin Mini Trust (BTC), in a recent filing. One notable difference is the lower management fee of 0.15%, making it more attractive than the original GBTC which charges a higher fee.
The document also reveals the amount of Bitcoin (BTC) that Grayscale intends to contribute to the endowment fund from its trust: an equivalent of 63,204 Bitcoins, which represents 10% of the total assets held in GBTC.
In simpler terms, if you own shares of GBTC, you’ll automatically receive equivalent BTC shares from the trust without needing to make separate transactions. (Pro forma financial reports present anticipated income and expenditures for a company based on past figures and planned strategies.)
Grayscale’s Bitcoin Mini Trust aims to offer investors in GBTC a more affordable alternative, making it more competitive with other Bitcoin ETFs that were approved in January.
In simple terms, if you’re currently an GBTC shareholder, you’ll be exempt from paying capital gains tax due to this spinoff. This implies that your investment will automatically be transferred to the newly formed fund without incurring any taxes right away.
If investors in early-stage GBTC decide to switch to a less expensive rival product, those who have earned significant profits, amounting to thousands of percentage points, could face substantial tax liabilities.
Approximately a decade ago, Grayscale’s GBTC was initially introduced through a private placement with a relatively high fee of 1.5%. These shares were initially tradeable over-the-counter (OTC) starting in mid-2015. This OTC trading continued until January 2024 when GBTC was upgraded to a Bitcoin spot ETF and began trading on the New York Stock Exchange Arca (NYSE Arca).
Currently, Grayscale is the leading contender, managing assets worth around $17.5 billion for its IBIT fund. In comparison, BlackRock’s IBIT fund manages slightly over $17.5 billion but has assets under management amounting to approximately $19.6 billion.
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2024-04-20 19:00