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GBTC sees second largest outflow in 15 years; Grayscale re-applies for mini ETF with code "BTC"

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GBTC sees second largest outflow in 15 years; Grayscale re-applies for mini ETF with code "BTC"

Grayscale has submitted an S-1 filing to the SEC on March 12th to register the Grayscale Bitcoin Mini Trust, BTC, a mini version of its flagship Grayscale Bitcoin Trust, for listing on the New York Stock Exchange.

Grayscale Introduces Mini ETF with Code Name "BTC"

The document indicates that although BTC will operate independently from GBTC, existing GBTC holders will have a certain proportion of their holdings split and automatically allocated into smaller BTC.

The document does not disclose the split ratio, but Grayscale will submit another 14C document in the future to further explain the terms of the planned split.

The document states:

The related split matters will not seek consent, authorization, approval, or mandate from GBTC shareholders. Shareholders do not need to pay any consideration, exchange, or relinquish existing GBTC shares, nor take any other action to receive trust shares on the distribution date.

Bloomberg ETF analyst James Seyffart is also very uncertain about the approval possibility, speculating that it may occur within 60 to 270 days. He had speculated on January 9th that Grayscale might use the stock code "BTC" for issuing a smaller Bitcoin ETF with the holdings.Speculation

GBTC Makes History with Net Outflows

Another analyst, Eric Balchunas, mentioned that over the past 15 years, GBTC's net outflows rank second among all ETFs at -10.5 billion USD, second only to BlackRock's emerging market index EEM at -12.3 billion USD.

Interestingly, the mini ETF was originally invented by BlackRock, which issued the mini IEMG for EEM at that time. Grayscale is now also trying to issue a mini version of GBTC.

James Seyffart pointed out that since GBTC converted to a spot ETF, around 11 billion USD has flowed out, but the asset size of GBTC remains roughly the same as before the conversion, at 28.6 billion vs. 28 billion USD, despite about a 35% outflow of shares.

This is mainly due to the significant increase in the price of Bitcoin, which has allowed Grayscale to maintain the illusion of a stable asset size in the bull market.