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Grayscale Bitcoin ETF (GBTC) Drops 11% Ahead of BTC Mini Trust Distribution
Grayscale’s Bitcoin ETF (GBTC) saw a significant decline of over 11% during today’s trading session. This decline coincides with the record date of the split of its new Bitcoin Mini Trust. The sharp drop in GBTC’s value marks a pivotal moment as investors react to the upcoming transfer of a portion of GBTC’s BTC holdings to the new trust.
Grayscale Bitcoin ETF Drops 11%
According to Yahoo Finance, the price of GBTC fell 11.42% to $52.87 during trading on Tuesday, July 30. This comes amid accelerated market outflows. Shades of grey The Bitcoin ETF saw a negative outflow of $54.3 million on Monday. Additionally, the negative sentiment led to a loss of investor confidence in the Mini Trust distribution.
James SeyffartBloomberg analyst Seyffart provided insight into the mechanics of the split. He said the 11% drop in value of GBTC reflects the anticipated transfer of assets to the Bitcoin Mini Trust. Seyffart stressed the importance of the registration date, which is today, and indicated that BTC trading is expected to begin tomorrow, pending final approvals from the SEC.
“We expect Bitcoin to begin trading tomorrow. But there are still some final ‘approvals’ from the SEC that are needed,” Seyffart noted. Earlier this week, Nate Geraci, president of The ETF Store, confirmed that the SEC had indeed given the green light to Grayscale’s Bitcoin Mini ETF.
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Grayscale BTC Mini-Trust Distribution
The new fund, with the ticker BTC, is expected to debut as a spin-off of GBTC, fueling expectations in the cryptocurrency market. The transfer involves GBTC transferring a certain percentage of its Bitcoin The shares of the new trust will be transferred to the new trust, which will allow for the distribution of new BTC shares to GBTC shareholders. This distribution is intended to streamline market operations and improve the accuracy of the trust’s share prices.
The Grayscale Bitcoin Mini Trust will follow a similar management fee structure as the Grayscale Ethereum Mini Trust. Therefore, it has set a nominal fee set at 15 basis points. A crucial aspect of this transition is the registration statement on Form S-1 for the BTC Trust.
Grayscale is awaiting final SEC approval of this document, which is essential for the legal and regulatory authorization of the public offering of the trust’s shares. This step is crucial because it ensures compliance with regulatory standards and facilitates the trust’s operations in the public market.
Currently, the record date for the initial distribution of Bitcoin Mini Trust shares is set for July 30, 2024. Thereafter, the 10% distribution is expected to occur the following day. Grayscale BTC ETF shareholders of record as of the close of trading today will receive a one-for-one distribution of new Bitcoin Mini Trust shares. This means that each GBTC shareholder will receive an equivalent number of BTC shares, reflecting their current holdings of GBTC.
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Kritika Mehta
Kritika has over 2 years of experience in the financial news industry. Currently a crypto journalist at Coingape, she has always shown a knack for blockchain technology and cryptocurrencies. Kritika combines in-depth analysis with a deep understanding of market trends. With a keen interest in technical analysis, she brings a nuanced perspective to her reporting, exploring the intersection of finance, technology, and emerging trends in the crypto space.
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