(Reuters) – Digital asset manager Grayscale Investments said on Tuesday it was contemplating a spin-off of its spot bitcoin exchange-traded fund (ETF), the Grayscale Bitcoin Trust (GBTC), which has been lagging peers in recent months. GBTC’s higher fees appear as one of the key factors in drawing investors to rival ETFs, Reuters has reported.
GBTC has seen capital outflows of $11.05 billion, according to data from crypto research firm BitMEX Research, since January, even as bitcoin climbed to an all-time high and competitors recorded inflows over the same period.
To implement the spin-off, Grayscale filed to list shares of a new investment product called the Grayscale Bitcoin Mini Trust, which will receive a certain amount of bitcoin held by GBTC. In exchange, current GBTC shareholders will get stock in the Mini Trust, the company said. Grayscale is yet to determine the fees the Mini Trust will charge, according to the filing. Following the spin-off, both GBTC and the Mini Trust will operate independently, it said. The company’s landmark victory in a legal fight with the Securities and Exchange Commission (SEC) led to the approval of spot bitcoin ETFs – investment vehicles that allow shareholders to gain exposure to bitcoin without directly holding it – in January. Since the approval, competitors BlackRock’s iShares Bitcoin ETF and Fidelity Wise Origin Bitcoin Fund have recorded inflows of $10.59 billion and $6.37 billion, respectively. The ETF euphoria and hopes that the Federal Reserve will soon cut interest rates have propelled bitcoin, the world’s biggest cryptocurrency, above $72,000.
(Reporting by Niket Nishant in Bengaluru and Hannah Lang in Washington; Editing by Vijay Kishore)
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