Summary Grayscale's Bitcoin Mini Trust ETF is gaining market share due to its low expense ratio of 0.15% and could grow into the top 5 Bitcoin ETFs in the coming months. Total Bitcoin ETF assets under management have grown from approximately $30bn to over $105bn in the last 12 months. As more individuals, institutions and governments adopt Bitcoin as a store of value, and as network supply decreases. Price per Bitcoin could reach prices over $200,000 before year-end 2025. It has been nearly a year since the Securities and Exchange Commission approved the first 11 Bitcoin Spot ETFs for trading. Since then, over $100bn of funds have flowed into these ETFs and with the inflows, the ETFs have amassed over 1.1 million in total bitcoin. Grayscale’s newest bitcoin ETF ( BTC ) continues to capture market share due to its lower expense ratio of 0.15% compared to its predecessor, Grayscale Bitcoin Trust (GBTC) which continues to have a 1.5% expense ratio. I continue to see The BTC ETF to grow into the top 5 largest Bitcoin ETFs by assets under management within the next 18 months, meaning it would have to triple or quadruple its current bitcoin holdings of just over 39,000. Grayscale has an advantage as it charges 0.05% less than most of its competition. Most Bitcoin ETFs charge an expense ratio of 0.20 to 0.25%, which ends up being the equivalent of $50 to $100 in additional expense per bitcoin equivalent in holdings per annum. Full disclosure, I have been an owner of the Grayscale Bitcoin Trust since 2020, and since this time, they have spun out the BTC (mini trust) ETF and since then, any additional top-ups I want to make in Bitcoin have been through this ETF rather than the Original Grayscale spot ETF. I remain steadfast in my belief that Bitcoin is a great alternative ETF for individual, institutional or companies to hold now and into the next decade as normal government backed currencies will continue to experience large amounts of inflation and lose trust. About the ETF Grayscale Bitcoin Mini Trust is a Bitcoin spot ETFs that holds Bitcoin as its only underlying asset and thus trade in tandem with the price of Bitcoin, which at the time of writing is approximately $96,000. This is important to note as there are other ETFs that are Bitcoin-linked which may trade Futures Contracts or leveraged derivatives and for those seeking strictly Bitcoin Spot ETFs, I do not want you to get impacted by choosing the wrong ETF. Always read a prospectus and understand holdings and ETF objectives prior to investing. Following up on my previous article In my previous article , I wrote about the foundations of what the new Grayscale Bitcoin ETF was about and provided a $120,000 to $200,000 per bitcoin target by mid-2025. Now that we’ve seen prices grow up to $110,000 in the last 30 days, I am upping the lower end of my price range from $120,000 to $135,000. Also in that August 2024 article I wrote that after the peak in mid-2025, Bitcoin prices would retrace to the levels observed then, which was $58,000. With institutional, corporate and individual level buying coupled with the potential of government buying, I find it hard to believe the price would fall over 50% from its peak like we have observed in the past. Demand has increased, and daily mining supply has decreased, making a retracement less and less likely. How has the AUM of Bitcoin ETFs Grown At their inception in January 2024, bitcoin ETFs started with an approximate 600,000 bitcoin under management at Grayscale worth approximately $30bn. Since then, iShares/BlackRock has continued to dominate and has grown into the largest player with over 550,000 bitcoin - equaling approximately 50% of the market share, and altogether, the top 11 ETFs hold approximately 1.1 million bitcoin under management. Since late December we have seen a slight plateau as the price of bitcoin has retraced from $110,000 to $92,500 and has since started a small push back to $96,000. That said, now that bitcoin is an easier than ever product able to be invested in, comparable to an S&P500 ETF, I anticipate we will continue to see inflows on a monthly basis as more and more individual, institutional and companies hold bitcoin in their portfolios and contribute to them on a monthly or bi-monthly basis. Bitcoin ETF AUM over time (The Block Co) That is what has led to the 80% growth of bitcoin under management and the total value of these Bitcoin ETFs to grow from $30bn to the approximate $105bn they are today. The Grayscale Bitcoin mini trust has gained market share and is almost neck and neck against the ARK 21Shares Bitcoin ETF ( ARKB ) and the Bitwise Bitcoin ETF ( BITB ). The mini trust has established itself as the 6th dominant ETF in the industry and has outpaced the growth of Vaneck and Valkyrie ETFs as a distant 7th and 8th. Current ETF Assets Under Management (Treasuries BitBo) After some time, the original Grayscale bitcoin ETF has now moved to 3rd place from its previous position in 2nd place ETF in the industry. I anticipate this ETF will continue to lose market share while investors move towards a cheaper expense alternative. Future price of Bitcoin As more institutions and governments continue to use bitcoin as a store of value and or means for moving funds, I believe more than ever that every individual should put 2% or more of their income into Bitcoin. The rainbow chart , while qualitative more than quantitative, signals that as bitcoin blockchain rewards continue to halve and the supply is held by more and more institutions and governments, the price will inevitably go higher due to its supply of only 21,000,000 bitcoin. As demonstrated below, there is an obvious pattern 18 months post halving cycle where bitcoin increases in price due to lower supply and the shock that the network rewards. Just as a reference, the previous halving occurred in April 2024. Bitcoin Rainbow Chart (blockchaincenter.net) For those unfamiliar with the Rainbow chart, it is a log plot versus time (non-log) where the rainbow colors represent a similar log trend just at a slightly different location on the y-axis. This log trend has been adjusted from peaks and troughs of previous cycles of bitcoin movement to show when bitcoin was or is currently under or overpriced. Today, the rainbow plot shows things are still at a moderate price and people should hodl. Based on previous cycles, the expected price should increase to anywhere between $160k-$220k 18 months post halving which occurred in April 2024. As noted, I have switched my bottom target from $120,000 to $135k based on the recent movements in 2024 with time remaining before the end of the crypto bull market (YE2025). With the price of bitcoin currently $96,000, I anticipate the Grayscale Bitcoin Mini Trust ETF to increase 60-120% before year-end 2025. With a current price of $43, that would correspond to a price of $69 to $99. Previously, I was in the camp that after the bull markets, there would be a substantial drop, or retracement in the price of bitcoin to approximately one third or one half of its peak value. Now that more hedge funds, institutional and government entities are buying into the space, I believe there will still be a bear market and retracement, but that retracement is less severe than previous bear markets. That noted, there may need one more bull/bear cycle to play out before we confirm if the bear market bust trend post bull peaks continue. Conclusion Over the last year, Bitcoin spot ETFs being approved by the SEC has shined a positive light on the cryptocurrency as funds from individual and institutional clients continue to roll in. Institutions like Fidelity and BlackRock will remain the dominant ETFs as they have access to retirement accounts like 401K and 403B plans, as more investors become aware and expense ratio cautious Grayscale mini trust will benefit as the Grayscale brand name has been associated with bitcoin for quite some time, and it remains the lowest expense bitcoin ETF. The mini trust ETF has closed the gap to the 4th and 5th largest bitcoin ETFs and over the next few months, I anticipate the BTC ETF will overtake Bitwise as the 5th largest and, eventually, over the coming decades, the third or fourth-largest ETF by assets under management. As bitcoin becomes normalized, I see it prudent for individual investors to put 2% of their monthly salary into bitcoin as continuous contributions. This move alone and the acceptance of bitcoin ETFs into retirement accounts will continue to push demand for bitcoin higher throughout 2025 and lead to a potential peak of $99 for the ETF or $220,000 per bitcoin.
