Grayscale Bitcoin Trust to Add SEC Legitimacy: Files Form 10 (It’s Not an ETF)

November 21, 2019 | Digital Assets, News
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In another first, the Grayscale Bitcoin Trust files a Registration Statement on Form 10 with the Securities and Exchange Commission (SEC).

In September 2013, asset manager Grayscale launched its Grayscale Bitcoin Trust. It went on to become the first-ever publicly traded Bitcoin investment product in the U.S. via listing on the OTC Markets in 2015. It trades under the ticker symbol GBTC.

“Today, it’s clearer than ever that there is strong demand for Bitcoin access products as GBTC’s 3-month trailing trading volume has tripled year-over-year,” Grayscale said in a blog.

The Grayscale Bitcoin Trust has since grown to become the biggest Bitcoin investment product in the world. It was once a product for the sophisticated and high net worth investor, as well as institutions. But it’s now open to all investors as a listed product.

It’s popular with individual investors because they can get exposure to Bitcoin without having to purchase, transfer, and store digital assets themselves and manage additional individual accounts, wallets, and private keys. The Grayscale Bitcoin Trust offers investors ease of mind and an investment product that is familiar to both financial advisors and investors.

Grayscale’s Q3 of 2019

According to the asset manager’s Investment Report, in Q3 it received a record inflow of $254 million. Quarter on quarter, inflows tripled from $84.8 to $254.9 million.

However, the Grayscale Bitcoin Trust accounted for $171.7 million in inflows. “In 3Q19, we saw the heaviest quarterly inflows to Grayscale Bitcoin Trust in the product’s six-year history, including nearly $75 million in a single day,” the report said. “July inflows also reached the highest level we’ve seen in a single month, well above the previous high of $64.7 million raised in December 2017.”

The Grayscale Bitcoin Trust Files for SEC reporting status

In another step aimed at becoming more investor-friendly, Grayscale has applied to the SEC in Form 10 for designation as an SEC Reporting Company.

If the SEC accepts the application, the Trust will be subject to various reporting obligations under the Exchange Act. These include filing annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.

These reports also have to be filed by large listed entities such as Apple and the SPDR Gold Trust.

What it means for investors if the application becomes “effective,” that is approved

The Grayscale Bitcoin Trust would become the first digital currency investment product to become an SEC Reporting Company.

There will be no change in annual fees.

As mentioned above, reporting requirements will expand, and investors will benefit from greater transparency. Institutions will be particularly happy with the development, therefore.

Larger investors will need to report beneficial ownership or transactions.

But the biggest benefit would be liquidity. The current 12 months compulsory holding period for private placement investors will reduce to 6 months.

Grayscale Bitcoin Trust is not an ETF

The asset manager is careful to clarify that:

“This voluntary filing should not be confused as an effort to classify Grayscale Bitcoin Trust as an exchange-traded fund (ETF). The structure of the Trust will not change, and it will continue to not operate a redemption program nor trade on a national securities exchange.”

[Related Story:  There’s Hope Still for a Bitcoin ETF; SEC Reviewing Bitwise Rejection ]

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