The market is reacting to the BTC Mini Trust‘s distribution, resulting in a Grayscale Bitcoin ETF(GBTC) decline during today’s trading session.
Grayscale’s Bitcoin ETF (GBTC) encountered a significant drop of over 11% in today’s trading session. This decline coincides with the record date for the spinoff of its new Bitcoin Mini Trust. The sharp decrease in GBTC’s value signals a pivotal moment as investors react to the forthcoming transfer of a portion of GBTC’s BTC holdings to the newly established trust.
Grayscale Bitcoin ETF experienced an 11% decline
The GBTC price experienced an 11.42% decline to $52.87 during the trading session on Tuesday, July 30, as reported by Yahoo Finance. This occurs in the Grayscale Bitcoin ETF, which experienced a $54.3 million negative flow on Monday, reflecting the accelerated outflows. Moreover, the negative sentiment has contributed to losing investor confidence amid the Mini Trust distribution.
James Seyffart, a Bloomberg analyst, explained the mechanics of the spinoff. He clarified that the 11% value decline in GBTC reflects the anticipated transfer of assets into the Bitcoin Mini Trust. Seyffart underscored the significance of the record date, which is scheduled for today, and predicted that trading for BTC will commence tomorrow, subject to final SEC approvals.
“We are expecting $BTC to begin trading tomorrow. But there are still necessary final ‘approvals’ from the SEC,” Seyffart noted. Earlier this week, Nate Geraci, president of The ETF Store, verified that the SEC had given the green light for Grayscale’s Bitcoin Mini ETF.
Grayscale BTC Mini Trust Distribution
With the ticker BTC, the new fund is set to début as a spinoff of GBTC, fueling anticipations in the cryptocurrency market. The transfer entails the transfer of a specific percentage of GBTC’s Bitcoin holdings to the new trust, thereby distributing new shares of BTC to GBTC shareholders. This distribution aims to enhance the accuracy of pricing for the trust’s shares and expedite market operations.
The administration fee structure of the Grayscale Bitcoin Mini Trust will be comparable to that of the Grayscale Ethereum Mini Trust. Therefore, it established a nominal levy of 15 basis points. The registration statement on Form S-1 for the BTC Trust is a critical component of this transition.
This document is essential for the legal and regulatory authorization of the trust’s shares to be offered to the public, and Grayscale is currently awaiting the SEC’s final approval. This phase is critical as it ensures compliance with regulatory standards and facilitates the trust’s operations within the public market.
Today, July 30, 2024, is the current record date for the initial distribution of Bitcoin Mini Trust shares. Subsequently, it is anticipated that the 10% distribution will take place on the subsequent day. A one-for-one distribution of new shares in the Bitcoin Mini Trust will be made to Grayscale’s BTC ETF shareholders of record as of today’s close of business. This implies that each shareholder of GBTC will acquire an equivalent number of BTC shares, which will correspond to their current holdings in GBTC.