Summary Grayscale's BTC ETF offers low-cost Bitcoin exposure with a 0.15% fee, $3.55B AUM, and 38,012.91 BTC held in custody. BTC ETF minimizes fee impact over time, and this makes it more aligned with Bitcoin’s long-term value compared to its peers. I see this Bitcoin dip as a pullback, not the start of a bear market—based on both cyclical and statistical analysis. It’s not like holding Bitcoin on-chain and storing it on a Ledger—there’s always some "external risk", but at least it’s measurable, since it’s regulated. I’m talking about BTC, but I’m referring specifically to Grayscale’s latest ETF: the Grayscale Bitcoin Mini Trust (BTC) ETF. A great choice in terms of ticker, I must say, clear and unmistakable, especially considering we’re talking about a Bitcoin ETF. In fact, I believe it’s one of the best Bitcoin-themed passive funds on the market right now. But I’m not saying anything new, I've already covered much of this in my previous article on GBTC. This time, though, I’d like to focus more closely on BTC, the “mini” version of GBTC, and explore its actual role in a portfolio. So I wonder: “Can BTC ETF be used as a standalone solution to gain Bitcoin (SPOT) exposure?” Spoiler: It might, at least partially. It is BTC, but it is an ETF Let’s start with what Grayscale clearly wants to highlight on its official page : BTC ETF is a (mini) low-cost ETF. Sounds a bit awkward, doesn’t it? The way it's phrased almost makes it sound like “low” refers to quality rather than cost, and “mini” like a stripped-down version of the original (GBTC). But in truth, it really is low-cost, and “mini” only refers to the fee: with an expense ratio of just 0.15%, it easily outshines most other Bitcoin replication ETFs on the market. I have to admit, BTC ETF easily passed my initial screening: It has $3.55B in AUM, and it’s growing. It holds approximately 38,012.91 BTC, which translates to about 0.0004431 Bitcoin per share, based on the 85,769,963 shares listed in the latest fact sheet. The Bitcoin is held in custody by Coinbase Custody Trust Company (which, to be honest, I’m not a big fan of, we’ll get to that later). The benchmark is transparent and trackable, and the price is tightly linked to NAV, tracking the CoinDesk Bitcoin Price Index (XBX) . For those new to this, don’t make the mistake of confusing BTC ETF with GBTC. Profile (GBTC - BTC) (Seeking Alpha) GBTC was a closed-end trust prior to its 2024 conversion into an ETF, and was widely known for its illiquidity and significant deviations from NAV. With the transition to an ETF, many inefficiencies were resolved, but for some reason, it still carries a 1.5% fee. Price return (GBTC - BTC) (Seeking Alpha) That’s why I genuinely appreciate Grayscale’s initiative here. They’ve launched a clean, low-cost, and straightforward solution like BTC ETF, mini in fees only, not in quality. Peer analysis It has competitors, but I prefer to consider only those with higher AUM, especially since BTC ETF is still one of the relatively newer instruments on the market (though issued by one of the most established names in the crypto space). Here’s my peer table for reference. Profile (peers) (Seeking Alpha) In ETFs like BTC, where the underlying asset has exponential growth potential, fees become a critical metric to properly weigh in one’s calculations. Each share represents a fraction of BTC, and to cover expenses, the fund will (naturally) sell part of its Bitcoin holdings over time. This means the number of BTC per share will gradually decrease, and the higher the ETF’s fee, the more impactful this effect becomes. Price return (peers analysis) (Seeking Alpha) Considering Bitcoin’s historical nature, high-growth and long-term compounding, this could represent a significant cost over the years. That’s why I truly appreciate BTC ETF: it minimizes this risk. Over the long run, it could very well be the ETF where fee impact is the least noticeable, maintaining a smaller performance spread compared to its competitors. In fact, there isn’t a big gap between NAV and price, no obvious imbalances. That is certainly a comforting sign, and one that distinguishes BTC ETF even more from its long "lost cousin" (and now peers), GBTC, which became known for destroying value. BTC ETF NAV (Grayscale) In my opinion, the market will soon realize this, and we’ll likely see its AUM grow significantly over time. AUM of BTC Peers (chart) (Seeking Alpha) My outlook on BTC Now that we’ve identified the instrument, the next step is to assess whether the recent pullback should be viewed as an opportunity, or as the start of an inevitable bear market. Personally, I remain bullish on Bitcoin pretty because I tend to favor a statistical perspective, because, at the end of the day, Bitcoin is a mathematical asset. My view is built on 2 practical assumptions: Cyclical analysis based on the most widely used mathematical models still points to higher end-of-cycle price targets. I talked about it here. Statistical models suggest that the likelihood of a new bear market remains low. I talked about it here. Risk Since I’ve already discussed Bitcoin and its risks in depth, I’d rather highlight an aspect I believe is important to know about Grayscale’s BTC ETF: the custody service provided by Coinbase Custody Trust Company. It’s a solution regulated by the State of New York and includes high-profile institutional clients, so what I’m about to mention is naturally a very minor risk, but still a real one: operational or legal issues related to the service. This brings up the classic “not your keys, not your crypto”, or rather, a revised version of it. In fact, the crypto is yours, but it’s held through instruments you don’t directly control, like a ledger. True, this isn’t a risk comparable to that of a traditional CeFi exchange, in fact, it’s measurable due to its greater transparency. My opinion So, I conclude that for those seeking traditional access and wanting to avoid the operational complexities of blockchain, the cost of BTC ETF is the minimum price to pay for a complete product. Naturally, a purist wouldn’t agree; although these funds physically hold Bitcoin, there will never be full control like with native solutions such as a Ledger. Being aware of the risk of having to pay a potentially expensive fee over time, I believe that, while this issue does exist, it is minimized in BTC ETF.
