Grayscale, the world's largest crypto asset management firm, is taking significant steps towards converting its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin exchange-traded fund (ETF). Marking its first trust agreement amendment in five years, the firm is focused on streamlining operations in anticipation of the conversion.
Key to these changes are two proposed amendments. Firstly, the payment frequency of the fund's fees is set to shift from monthly to daily, although the fee amount remains unchanged. Grayscale currently charges a 2% management fee for GBTC, while firms waiting for spot Bitcoin ETF approval have fees ranging between 0.7% to 1%. The second proposal involves temporarily holding some trust assets in omnibus accounts, a move designed to enhance the efficiency of share creation and redemption processes, albeit with some risk of commingling with third-party assets.
These amendments, while not prerequisites for the ETF conversion, aim to bring operational efficiencies. Grayscale has recommended shareholder approval for both proposals, acknowledging potential risks like increased costs from more frequent fee payments and marginal risks associated with asset commingling.
In the broader context, these developments come as the industry observes increased regulatory activities. Senior Bloomberg ETF analyst Eric Balchunas reported on BlackRock's recent meeting with the SEC's Trading and Markets division, which oversees ETF applications. Meanwhile, the latest firm to apply for a spot Bitcoin ETF is Pando, with analysts predicting a 90% approval probability for such ETFs by January.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
