Grayscale, the world’s largest digital asset manager, has announced some important changes to its Grayscale Bitcoin Trust (GBTC) in preparation for a possible conversion to a spot Bitcoin exchange-traded fund (ETF). The proposed amendments, which are subject to shareholder approval, aim to enhance the operational efficiency and competitiveness of GBTC.
One of the key amendments is to reduce the management fee of GBTC from 2% to 0.7%, which is in line with the fee range of other spot Bitcoin ETF applicants. This will make GBTC more attractive to investors who are looking for low-cost exposure to Bitcoin. The fee reduction will also help GBTC to narrow the discount to the net asset value (NAV) of the trust, which has been a persistent issue for the product.
Another amendment is to allow the commingling of assets in an omnibus account format, which will simplify the creation and redemption of shares. This is a common practice for ETFs, as it reduces the operational complexity and costs for the fund and its authorized participants. Grayscale will use Coinbase Custody as its service provider for this feature.
Grayscale’s Amendments Still Need to be Approved by Shareholders
Grayscale has been actively pursuing the approval of a spot Bitcoin ETF from the U.S. Securities and Exchange Commission (SEC), which has so far rejected all such applications. Grayscale believes that GBTC, which has over $40 billion in assets under management, is well-positioned to become the first spot Bitcoin ETF in the U.S. market.
The shareholders of GBTC have 20 days from the filing date on Wednesday, November 29, to vote on the proposed amendments. Grayscale said that the amendments are not mandatory for the conversion to an ETF, but are intended to provide benefits to both Grayscale and GBTC. Grayscale also said that GBTC remains ready to uplist as a spot Bitcoin ETF to NYSE Arca upon appropriate regulatory approvals.