Grayscale Bitcoin Trust (GBTC) Revamp Preps for Uplist in Intensifying ETF Race

Grayscale, the custodian of the Grayscale Bitcoin Trust (GBTC), is implementing significant updates to its trust agreement. The impending alterations, the first since 2018, aim to optimize the structure of GBTC in anticipation of its transition to a spot Bitcoin exchange-traded fund (ETF). This update seeks to level the playing field against formidable contenders like asset management titan BlackRock.

Outlined in a recent filing on Wednesday, the proposed modifications in the trust agreement mark a pivotal shift for GBTC. The amendments will be subjected to a shareholder vote, signifying the weight of these impending changes. Two crucial adjustments stand at the forefront of this overhaul.

Firstly, the restructuring permits fees—historically collected by Grayscale on a monthly basis—to be payable on a daily schedule. It’s important to note that this alteration is a structural adjustment rather than a fee reduction. Grayscale has committed to fee reduction, but this aspect remains under finalization, clarified a company spokeswoman. Presently, Grayscale charges a 2% management fee for GBTC, while other firms awaiting spot Bitcoin ETF approvals typically operate within the 0.7%-1% fee range, as outlined in an analyst report by Matrixport.

The second pivotal update revolves around the commingling of assets in an omnibus account format. This innovative adaptation, borrowed from Coinbase Custody’s service, aims to facilitate a more seamless creation and redemption of shares—an essential mechanism for ETF operations. Notably, BlackRock’s iShares product, alongside several other spot ETF applicants, also intends to leverage Coinbase Custody for their ETF offerings.

Industry analysts are bracing for the anticipated approval of multiple spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) in quick succession. This dynamic environment has created a palpable sense of urgency among applicants, underlining the pivotal nature of this regulatory approval race. The first mover in this race is expected to gain a substantial advantage, potentially capturing a significant portion of everyday investors in the burgeoning Bitcoin ETF market.

The impending modifications to GBTC’s structure signal a calculated maneuver by Grayscale to position itself favorably in the evolving landscape of Bitcoin investments. The stakes are high, and as the race intensifies, the industry eagerly awaits the SEC’s decisions that could redefine the dynamics of Bitcoin investment vehicles for years to come.

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