Good morning Bitcoin: Grayscale speculates on ‘extremely cheap bitcoin ETF’

Good morning! We have listed the latest news for you. Start the day with a bitcoin breakfast.

Bitcoin miners are facing unprecedented profits despite the expected drop in their income due to the halving. This event, which takes place every four years, halves the rewards for creating new data blocks. However, the recent introduction of the Runes Protocol has caused massive congestion on the network, significantly increasing transaction fees and creating an unexpected windfall for miners.

Grayscale, currently the provider of the market’s most expensive Spot Bitcoin ETF, plans to launch a new and extremely low-cost spinoff version of its ETF. This concerns the so-called Grayscale Bitcoin Mini Trust (BTC), for which a fee of 0.15% on an annual basis must apply.

The existing Grayscale Bitcoin Trust (GBTC) has a fee of 1.5%, making it ten times more expensive than the company’s new Bitcoin Mini Trust.

The four-yearly bitcoin halving took place this weekend. This halved the reward for miners for producing a block from 6.25 to 3.125 bitcoin. With that halving, the costs of producing a bitcoin have risen considerably.

According to estimates from Capriole Investments, those costs are currently $77,400 per bitcoin. In the above graph from Capriole Investments you can clearly see that the bitcoin price and the production costs of the miners follow each other reasonably well. Somehow it makes sense that the bitcoin price responds to rising production costs, because it is unattractive for miners to sell their bitcoin for less.