A big day for grayscale with the launch Of the Bitcoin mini trust now we'll get Some more on that in just a bit but First taking a look at markets we're Seeing a bit of a rebound for Bitcoin as Of around noon Eastern but yesterday the Cryptocurrency's price retreated to the $66,000 level following Monday's rally When Bitcoin was trading less than $100 Away from the $70,000 Mark now this Week's moves happening as investors were Digesting several political developments Including Republican Presidential Nominee Donald Trump's speech at Bitcoin 2024 in Nashville over the weekend and Looked ahead to Central Bank meetings Happening this week including the FED Meeting today now we're speaking before The FED decision but what would you say Is driving crypto markets right now and What are you paying attention to well Thanks Talia I mean it's really all of Those macro trends that are most Important and this is just a a huge Moment for for Bitcoin and and for Crypto collectively you have a uh you Know Bitcoin has come to Washington is Part of the US presidential election Debate obviously president Trump former President Trump has given a strong Embrace to bitcoin and the industry but Democratic Party leaders may also be Shifting stance aspects of the Trump Platform uh may have implications for
Bitcoin both president Trump and his Running mate JD Vance have in the past Called for a weaker dollar to support Domestic manufacturing that's the kind Of thing that could also support Bitcoin Over time and as you said the FED looks Ready to to cut interest rates the Bitcoin competes with the US dollar and International markets so lower interest Rates tend to be negative for the dollar And positive for for Bitcoin so this Type of macroeconomic environment is the Reason that people own Bitcoin in the First place and we're you know thrilled To see that coming together thrilled to Be able to offer uh new products in this Market Environment speaking of new products Back to your due product grayscales Bitcoin mini trust started trading today As a spot Bitcoin ETF it's essentially a Spin-off of your Bitcoin ETF which Started trading in January and offers a Lower fee of 0.15% that's compared to a 1.5% Management fee for gbtc holders which is Significantly higher than the charge Commanded by many ETF providers Including Black Rock and Fidelity now Grace scale's new ETF now marks the Cheapest among spot Bitcoin ETF what Prompted grayscale to launch the Bitcoin Mini trust what's the hope this new Product well the the motivation is the
Same motivation that the company has had All along since it got going uh more Than 10 years ago and the the goal is to Give us investors the best possible Efficient regulated safe access to Crypto in their brokerage accounts and Uh more than 10 years ago when gbtc got Started that product and that structure Was the best possible way to do that for For us investors the crypto indust Industry and the regulatory landscape Around it has come a long way since that Time and now we believe that we're able To offer new products including the the BTC product a uh low fee product Designed for investors that are new to Crypto looking for a Buy and Hold uh Instrument uh you know this is going to Be a great uh product for for them and So we're just trying to meet investors Wherever they are meet their meet their Needs and provide a full Suite of Products for uh investors to access Crypto In a regulated and safe uh way and so Gbtc will be suitable for some investors And our new BTC product I think suitable For for many more uh and I would just Mention we did exactly the same uh Strategy for ethereum we have a Long-standing ethereum product the Greats scale ethereum trust the largest Ethereum uh investment vehicle in the World we also did a spin-off of that
Product and so have a low fee uh version For ethereum under ticker etth so it Couldn't really be simpler and easier For investors to get brokerage account Access to crypto ticker BTC for Bitcoin Ticker eth uh for ethereum these are Going to be great products for investors That are new to the industry are you Hoping that your new Bitcoin ETF will Steal some of the Competition well we compete just like Any other uh business but you know our Our goal is focused on clients focused On end investors if we design products If we provide research and Analysis and Customer service uh that they find Compelling they're going to buy our Products so we happen to be a crypto Business uh but we're just an an asset Manager like any other that happens to Work in uh in in crypto so we're just Trying to design investment products and Provide excellent customer service that Investor value and if that happens Things will work out well from a Business standpoint over time now of Course this month the first spot ether ETFs hit the US grayscale spent years Building a trust that holds more than 9 Billion dollar worth of ether and now The trust has been converted to an ETF And is one of two The Firm offers now That the SEC cleared the way for these Products there is competition from other
Asset managers including Black Rock Fidelity and vck as investors can turn To the products with the lowest fees I'm Seeing that across the board SWAT ether ETF saw negative net flows in their First week amid massive outflows from The grayscale ethereum trust does this Concern you at all do you think interest In these products will increase as time Goes on how would you say gray skill Spot ether ETFs are performing so far I Think it's been an excellent launch uh So we've seen terrific volumes for these Products across the the group of nine if You compare them uh to the launch of the Bitcoin products back in January volumes Are roughly the same once you adjust for Ethereum's lower market capitalization So compared to to market cap bases We Have basically a similar volume picture As we have uh seen at the the start of The year um as you mentioned we have Seen some uh outflows collectively Across the across the group um Grace Skill had a 100% market share uh in These products before uh this last month And has been at this game for uh more Than than 10 years we never expected to Remain maintain that uh type of market Share as uh many more traditional Financial institutions are now getting Involved in offering crypto investment Products that being said I am thrilled With the products that we are offering
To investors and think we are very well Uh placed the larger largest uh product In the market today are great scale Ethereum trust ticker eth this is the uh Largest AUM highest volume uh product in The market uh and as you said the Spin-off uh product to eth uh is going To be a lower cost option maybe suitable For new investors where Buy and Hold Strategies are are most important so we Feel uh very well placed and I just say One other uh thing I mean I think many People who work in crypto have a similar Story they learn first about Bitcoin and Get excited about the idea of a digital Money system that doesn't have a central Authority in charge of it but it's Really ethereum and smart contracts and Decentralized applications that open Your eyes up to all the potential things That public blockchain technology can do And so I'm just thrilled to see both of These things in the marketplace uh today And thrilled to be telling the ethereum Story telling the uh the story of web 3 And decentralized uh applications to a Much wider range of investors so will Grayscale file applications for other Crypto ETFs now that spat ether ETFs Were approved grayscale also has a Salana trust so are there any plans to Try and convert that into an ETF in June Vanc became the first asset manager to File an application for a spot salana
ETF in the US 21 sharers became the Second issuer to file an application Where does grace scale stand in that Regard and what do you think will happen With those applications for spot salana ETFs now that spot ether ETFs are Trading for the last 10 years grayscale Has worked to provide the best possible Uh crypto investment access products to To us investors in the context of the Regulatory perimeter that we have in the In the US today so as that regulatory Framework evolves our business will Evolve with it as it has uh over over Time um you grac has more than 20 uh Crypto products available today running The gamut from lowcost passive ETF Products for Bitcoin and ethereum two Fully active uh private fund uh products And as you mentioned a variety of Private placement type products related To salana and and a variety of other Other things I think over time uh we Will work coopera with Regulators to see The sensible regulation for the industry And the the framework for all of these Assets is going to change what that Looks like over the next several months We we can't be sure um you know again Crypto has become part of the Presidential election part of of of the You know shifting politics uh in the United States we're going to have an Election and we'll see how that shakes
Out and I think we probably will under The next Congress see hopefully Bipartisan efforts around um you know Shaping the the rules of the road for For our industry and and grce scale will Of course cooperating with Regulators to Shape our products And it certainly will be very Interesting to see if your forecast does In fact come to fruition but I read a Headline today that grayscale Bitcoin Trust shares plunged as outflows Continue now when Bitcoin ETFs were Approved more than six months ago we saw Investors leave grayscales products for Cheaper alternatives in fact in May Black Rock's ey bit surpassed grayscales Gbtc and became the largest spot Bitcoin ETF in the US what's your outlook for Gbtc and what would you say to those who Are concerned about the flows well I Just like to clarify something uh there So the uh net asset value of gbtc Declined as a result of the spin-off and So gbtc investors such as myself uh Owned a owned the the product and then We spun off a portion of that into a Another product with ticker BTC and so Gbtc investors will receive a lower Blended fee uh reflecting their position In the previous gbtc product and their New uh position in the BTC uh product uh And so that decline in net asset value Uh doesn't reflect a market performance
It simply reflects this spin-off Structure and while this is uh Completely new and Innovative uh in uh Commodity um uh products like uh like These products is very common uh for Corporate action in INE equities for for Example and so um investors should have To take no action it's a tax-free event And should just happen automatically in Your brokerage account so nothing worry About uh with regard to that net asset Value uh Decline you know what is the future for Gbtc gbtc has been a great product you Know really the Vanguard product in our In our market and investors have done Very well who have been involved in that Product over the last 10 plus uh years I Think it will continue to evolve as it Has just over this last uh month with The with the spin-off uh and you know Again we are fully committed to bringing The best possible crypto products to to Us investors uh and you know we'll make Changes to gbtc as as needed in order to To do that but as I said earlier I'm I'm Thrilled to be able to offer the full Product uh suite gbtc and BTC in terms Of Bitcoin ETFs ethe and eth in terms of Ethereum ETFs in our full Suite of of Private products uh as well we feel very Well placed uh to service our Clients Zach pandel head of research at Grayscale Investments thank you very
Much for joining us it was my pleasure Thanks Talia
