- According to its latest filing on Wednesday, November 29th, Grayscale made several changes to the Grayscale Bitcoin Trust’s (GBTC) agreement for the first time since 2018.
- The two main changes for the GBTC update are subject to shareholder approval and occurred within six days of Grayscale updating its Bitcoin ETF application.
- Currently, Grayscale applies a 2% management fee for GBTC, while companies awaiting approval for spot Bitcoin ETFs typically range from 0.7% to 1%, according to an analysis report by Matrixport.
Grayscale continues to make changes to its application to stay ahead of its competitors: Another filing update has been made!
Grayscale Makes Changes in Spot Bitcoin ETF
Asset manager Grayscale made several changes to the agreement of Grayscale Bitcoin Trust (GBTC) for the first time since 2018, according to its latest filing on Wednesday, November 29th. This is generally aimed at preparing GBTC’s structure for a potential transition to a spot Bitcoin exchange-traded fund (ETF) and ensuring fair competition among other applicants, including leading asset management company BlackRock.
The two main changes for the GBTC update are subject to shareholder approval and occurred within six days of Grayscale updating its Bitcoin ETF application. The first proposed change allows the conversion of previous monthly total fees to a daily basis. This adjustment, according to a company spokesperson, is a structural improvement and does not involve a decrease in fees, even though it is not yet a finalized commitment.
Currently, Grayscale applies a 2% management fee for GBTC, while companies awaiting approval for spot Bitcoin ETFs typically range from 0.7% to 1%, according to an analysis report by Matrixport.
The second update allows the consolidation of assets in the omnibus account format, simplifying the process of creating and redeeming shares, serving as the fundamental processing mechanism for the ETF. This innovative approach is part of Coinbase Custody’s service. In particular, BlackRock iShares product and several other spot ETF applicants will also use Coinbase Custody.
Implementation of Changes
Grayscale will implement the proposed changes for its shareholders at no additional cost. Additionally, it emphasizes that these changes are not mandatory for the conversion to an ETF. Shareholders have a 20-day window starting from the application date on Wednesday to vote on the proposed updates. In an email sent to COINOTAG by a Grayscale spokesperson:
“Today, Grayscale outlined proposed changes to GBTC’s Trust Agreement; we believe these changes are beneficial for both Grayscale and GBTC. Importantly, this is business as usual, and GBTC is ready to be converted to a spot Bitcoin ETF on NYSE Arca when regulatory approvals are obtained.”
Amid all the developments regarding Bitcoin ETFs, the GBTC share price surged by 278% in 2023, significantly reducing the GBTC discount and bringing the spot BTC price to its lowest level in two years.
