Aligning GBTC’s Structure with Market Standards
Grayscale, the manager of the Grayscale Bitcoin Trust (GBTC), has proposed amendments to the trust’s agreement in preparation for a potential uplisting to a spot Bitcoin (BTC) exchange-traded fund (ETF). The move aims to align GBTC’s structure with other applicants, including asset management giant BlackRock, and optimize its position in the evolving market.
The proposed updates, which will be subject to a shareholder vote, involve two key modifications to the trust agreement, according to a Wednesday filing. Firstly, the amendment enables the collection of fees on a daily basis instead of the current monthly collection. Notably, this structural change is separate from any potential fee reduction, which Grayscale has committed to but is yet to finalize. Currently, GBTC charges a 2% management fee, while typical fees for firms awaiting spot bitcoin ETF approval range from 0.7% to 1%, as per Matrixport’s analyst report.
The second proposed update allows for the commingling of assets in an omnibus account, streamlining the creation and redemption of shares. The enhancement is made possible through the Coinbase Custody service, which will also be employed by BlackRock iShares and other spot ETF applicants. The efficient processing mechanism is crucial for ETFs, as it facilitates the seamless trading and tracking of underlying assets.
Grayscale’s proposed amendments are part of its ongoing efforts to optimize the GBTC structure and ensure readiness for an uplisting to NYSE Arca as a spot bitcoin ETF, pending regulatory approvals. It is worth noting that the amendments are not essential for the conversion to an ETF, according to the filing. Shareholders have a 20-day period from the filing date to cast their votes on the proposed updates.
