Grayscale, the overseer of the Grayscale Bitcoin Trust (GBTC), is initiating the first revision to the trust’s agreement since 2018, as revealed in a filing on Wednesday. The main goal is to improve GBTC’s framework. This is in anticipation of its potential migration to a spot bitcoin ETF.
The aim is also to create a level playing field with other contenders, such as the financial giant BlackRock.
The proposed modifications, subject to shareholder approval, encompass two key adjustments to the trust agreement. Firstly, there is a shift in the fee structure, transitioning from monthly collections to daily payments.
It’s crucial to emphasize that this alteration does not involve a reduction in fees. Grayscale has made a commitment in this regard, but it has not been finalized, as stated by a company spokesperson.
Grayscale’s Fee Adjustment and Asset Handling Innovations for ETFs Approval
Currently, Grayscale enforces a 2% management fee for GBTC. In contrast, the usual range for companies awaiting approval for spot bitcoin is between 0.7% and 1%. This information is according to an analyst report by Matrixport.
The second modification facilitates the commingling of assets in an omnibus account manner. This innovation, mirroring Coinbase Custody’s service, streamlines the creation and redemption of shares, which constitutes the fundamental processing mechanism of the ETF.
Notably, the BlackRock iShares product and several other spot ETF applicants are also set to leverage Coinbase Custody.
Grayscale’s Strategic Moves for Bitcoin ETF Approval and Trust Agreement Amendments
Analysts anticipate the U.S. Securities and Exchange Commission (SEC) to potentially greenlight several spot bitcoin (BTC) ETFs in quick succession. This heightens competition among applicants. The frontrunner stands to secure a significant first-mover advantage. This advantage is crucial in attracting a substantial share of everyday investors.
A Grayscale spokesperson conveyed;
“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.”
Emphasizing that this is part of their routine business activities, the spokesperson 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.”
Crucially, these amendments won’t incur additional costs for Grayscale shareholders, and they are not imperative for the conversion to an ETF, as clarified in the filing. Shareholders have a 20-day window from the filing date to cast their votes on the proposed updates.