What Happened: On July 19, Grayscale revealed plans to split part of its GBTC into a new ETF. The record date for the spinoff is today and BTC is expected to begin trading on the Arca exchange of the New York Stock Exchange (NYSE).
Existing GBTC shareholders will get shares of the Mini Trust in direct proportion to the shares they own in GBTC. The move will allow GBTC holders to hold the same amount of BTC in cash as before, but in two other funds.
James Seyffart, senior crypto analyst at Bloomberg, explained that the fallout will cause a change in price for investors. For example, a theoretical user with $1,000 worth of GBTC will necessarily have $900 in the original fund and $100 in the new mini ETFs.
Grayscale revealed the control payment for the BTC Mini Trust, however, industry analysts expect a significant reduction from GBTC’s existing 1. 5% annual control payment, according to CoinTelegraph.
See also: Will Bitcoin surpass $70,000?10x highlights key points to watch out for
Why it matters: Grayscale’s decision to split a portion of its GBTC into a new ETF comes amid a predicted “real” Bitcoin bull market. Prominent cryptocurrency trader Kaleo noted that since the 2012 halving, the cost of Bitcoin has skyrocketed by more than 500,000%. from $12 to approximately $70,000. He noted that most of this value discovery occurred in three separate periods, lasting less than two years. During the remaining time, Bitcoin’s value moved sideways or declined.
Meanwhile, in other news, famed economist Justin Wolfers mocked pro-Bitcoin Senator Cynthia Lummis’ (R-Wyo. ) view that adding Bitcoin as a strategic reserve would affect inflation and the national debt. Wolfers, who is also a professor at the University of Michigan’s Ford School of Public Policy, mocked Lummis’ plea as “one of the most amazing word salads” he had ever read and pointed out a lack of logical connection between the sentences.
Price Action: At the time of writing, GBTC is trading down 11. 04% at $53. 09, according to data from Benzinga Pro. Meanwhile, BTC is down 4. 43% in the last 24 hours , trading around $66,772.
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This content was partially produced with the help of Benzinga Neuro and has been reviewed and published through the editors of Benzinga.
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