Grayscale Upgrades GBTC for Spot Bitcoin ETF in Two Smart Moves

Grayscale, the manager of the Grayscale Bitcoin Trust (GBTC), is making strategic moves by proposing two key amendments to the trust’s agreement. The goal is to prepare for the launch of its spot Bitcoin exchange-traded fund (ETF). 

Meanwhile, this initiative aims to align its Grayscale Bitcoin Trust (GBTC) with other major applicants, including industry giant BlackRock, to optimize its standing in the ever-evolving market.

GBTC’s Proposed Amendments

On Nov 29th, Grayscale, the company that manages assets, made some changes to the agreement of its Grayscale Bitcoin Trust (GBTC). Notably, these changes mark the first revisions since 2018.

However, GBTC’s proposed amendments, subject to a shareholder vote, involve two critical modifications. Firstly, a shift to daily fee collection, a structural change separate from a potential fee reduction commitment by Grayscale. 

Currently, GBTC charges a 2% management fee, compared to the typical 0.7% to 1% range for firms awaiting spot Bitcoin ETF approval.

Merge of Assets for Seamless Operations

The second proposed update allows for the merging of assets in an extensive account, streamlining the creation and redemption of shares. Enabled through the Coinbase Custody service, the same platform used by BlackRock and other spot ETF applicants, this enhancement facilitates efficient processing essential for seamless trading and asset tracking.

Perhaps, these Grayscale’s proposed amendments are part of an ongoing effort to optimize the GBTC structure for a potential uplisting to NYSE Arca as a spot Bitcoin ETF, contingent on regulatory approvals. 

Notably, these amendments are not deemed essential for the eventual conversion to an ETF, as outlined in the filing.

Multiple ETF Approvals at Once

Industry analysts predict that the U.S. Securities and Exchange Commission (SEC) could greenlight several spot Bitcoin ETFs in rapid succession. As the crypto markets experience a recent rally, fueled by optimism surrounding ETF launches, the SEC’s decisions hold implications for major players like Grayscale, BlackRock, and the broader financial industry.

The optimism surrounding the potential launch of a spot Bitcoin ETF has contributed to the recent rally in crypto markets, witnessing Bitcoin reaching $38,198, the highest level since May 2022.