Grayscale Bitcoin Trust (GBTC) is undergoing a significant overhaul, marking its first update since 2018, as revealed in a filing made on Wednesday. The primary objective of these alterations is to optimize GBTC's framework in anticipation of its transition into a spot bitcoin exchange-traded fund (ETF). This move is designed to level the playing field, placing Grayscale on equal footing with formidable contenders like the asset management giant BlackRock.
The proposed adjustments to the GBTC update, which will be subject to shareholder voting, encompass two key modifications to the trust agreement.
The initial modification involves a shift from the previous monthly fee collection model to a daily payment structure. It's important to note that this change is primarily structural and not indicative of a reduction in fees, although Grayscale has expressed its commitment to fee reduction, which is still pending finalization, according to a company spokesperson. Grayscale's current management fee for GBTC stands at 2%, while analysts at Matrixport report a typical fee range of 0.7% to 1% for firms awaiting approval for spot bitcoin ETFs.
The second update allows for the pooling of assets in an omnibus account format. This innovative approach will facilitate a smoother process for the creation and redemption of shares, which serves as the core operational mechanism of the ETF. This innovation aligns with Coinbase Custody's service, a platform that the BlackRock iShares product and several other spot ETF applicants are also poised to utilize.
Industry analysts anticipate that the U.S. Securities and Exchange Commission (SEC) may grant approval for several spot bitcoin (BTC) ETFs in rapid succession. This has created a highly competitive environment among applicants, as the first mover in this race is expected to gain a significant advantage in attracting a substantial portion of everyday investors.
Grayscale's spokeswoman commented on the proposed amendments to GBTC's Trust Agreement, stating, "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." She added, "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." Notably, these amendments will not incur additional costs for Grayscale shareholders and are not deemed essential for the conversion to an ETF, as mentioned in the filing. Shareholders have a 20-day window from the filing date to cast their votes on these proposed updates.
Enigmatic Accumulation: Decrypting the Mysterious Buyer's $424M BTC Stash Amidst Grayscale's ETF Preparations
Mysterious Buyer Accumulates $424M Worth of BTC in Just Three Weeks An undisclosed entity has quietly acquired 11,268 bitcoin (BTC) valued at $424 million since November 10, catapulting them to the 74th position among BTC holders, as reported by Bitinfocharts. These acquisitions, including 875 tokens acquired on the day of the report, were made at prices ranging from $36,000 to $38,000, resulting in approximately $9.8 million in unrealized profits at the current bitcoin price, which hovers just below the $38,000 mark.
Speculation has arisen online regarding the identity of the wallet owner, with suggestions that it may be associated with one of the U.S. asset management giants eagerly awaiting regulatory approval to launch a spot bitcoin ETF. However, it remains unclear whether such "frontrunning" is permissible.
Nonetheless, if a spot ETF is granted approval, fund managers will be obliged to possess and safeguard a substantial quantity of bitcoin to meet potential demand. This sets it apart from synthetic products like CME futures, which involve the trading of contracts representing the underlying asset.
Gabor Gurbacs, an advisor at VanEck, remarked on Wednesday that the approval of a spot ETF would generate "trillions in value," even with a minimal demand ranging from $20 billion to $30 billion.
