Grayscale Gears Up for Spot Bitcoin ETF, Updating Trust Agreement for Sake of ‘Operational Efficiencies’

The changes involve the fee structure, and how assets can be custodied for smoother share creation and redemptions.

AccessTimeIconNov 29, 2023 at 9:30 p.m. UTC
Updated Mar 8, 2024 at 5:48 p.m. UTC

Grayscale, the manager of the Grayscale Bitcoin Trust (GBTC), is updating the trust’s agreement for the first time since 2018, according to a filing on Wednesday.

The aim is to optimize GBTC’s structure for an anticipated uplisting to a spot bitcoin exchange-traded fund (ETF) and level the playing field when it comes to other applicants such as asset management giant BlackRock.

  • Meme Coin Liquidity Hits Record High
    Meme Coin Liquidity Hits Record High
  • How Ledger Stax Plans to Make Self-Custody More Mainstream
    How Ledger Stax Plans to Make Self-Custody More Mainstream
  • Why Dogecoin Is a 'Weird' Investment
    Why Dogecoin Is a 'Weird' Investment
  • AI Tokens Surge as Nvidia Becomes World’s Most Valuable Company
    AI Tokens Surge as Nvidia Becomes World’s Most Valuable Company
  • The GBTC update, which will be put out for shareholder vote, involves two proposed modifications to the trust agreement.

    The first allows fees – which had been collected by Grayscale on a monthly basis – to be payable daily. This is a structural tweak and not part of any type of fee reduction – something Grayscale has committed to, but which has not been finalized as of yet, a company spokeswoman said.

    Grayscale currently charges a 2% management fee for GBTC; the typical range for firms awaiting approval for spot bitcoin ETFs is 0.7%-1%, according to an analyst report by Matrixport.

    The second update allows assets to be commingled in an omnibus account manner, which will enable a more frictionless creation and redemption of shares – the core processing mechanism of the ETF. This is an innovation comprising part of Coinbase Custody’s service. The BlackRock iShares product, along with a number of other spot ETF applicants, will also employ Coinbase Custody.

    Analysts expect the U.S. Securities and Exchange Commission (SEC) will likely approve several spot bitcoin (BTC) ETFs in quick succession. This makes for a febrile atmosphere among applicants, especially since the winner in this race is expected to have a sizable first-mover advantage in hoovering up a large portion of everyday investors.

    “Today, Grayscale has outlined proposed amendments to GBTC’s Trust Agreement that are intended to provide operational efficiencies that we believe are beneficial to both Grayscale and GBTC," a Grayscale spokeswoman said via email. "Importantly, this is in our normal course of business, and GBTC remains ready to uplist as a spot Bitcoin ETF to NYSE Arca upon appropriate regulatory approvals."

    The amendments will come at no extra cost to Grayscale shareholders and neither are essential to make the conversion to an ETF, the filing said. Shareholders have 20 days from Wednesday's filing to vote on the update proposals.

    Edited by Stephen Alpher.


    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Ian Allison

    Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.

    Read more about