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We believe Grayscale is not incentivized to offer a redemption option to shareholders. First, Grayscale collects 2% of NAV and so all else equal, the more shares in the fund, the greater the fees Grayscale collects. Second, the lack of a redemption feature also makes possible a scenario in which Grayscale could profit if the CEF ever trades at a discount. Grayscale could buy its own stock in the market at a discount. For example, Grayscale could accumulate shares at, say, a 30% discount to NAV, and then offer a redemption feature. The result would be an immediate 30% gain.

Grayscale continues with its massive Bitcoin (BTC) purchaing program. So far this week they have purchased 25,000 BTC which is nearly 7x of the amount of BTC mined this week and brings its total portfolio to 641,520 BTC, representing more than 3.4% of BTCs's circulating supply. Meanwhile, the premium on Grayscale Bitcoin Trust has come down from the December 22 high of 40.2% to 6.3% more recently. However, Grayscale hasn't bought any Ethereum since December 9 but continues to add some Ethereum Classic, Bitcoin Cash, Litecoin, Stellar, Horizon and eZEC.

In its current form, the Grayscale Bitcoin Trust charges shareholders a 2% fee. A 2% fee would never fly in the ETF world. Take the ProShares Bitcoin Strategy ETF (BITO), which carries an expense ratio of 0.95%. That's relatively expensive for an ETF, and it's less than half of GBTC's fee. So if Grayscale were to eventually be successful in its campaign to convert GBTC into an ETF, that would mean saying goodbye to potentially hundreds of millions of dollars in revenue - a painful thing to do in the thick of crypto winter. Still, it's worth reflecting on why Grayscale has been so passionate and public about this bid. Unlike an ETF, the trust has no redemption mechanism, meaning that GBTC shares can't be created and destroyed as demand shifts.

Alameda Research, an affiliate debtor of FTX, which filed for bankruptcy in November, has filed suit against Grayscale Investments. The suit seeks to "unlock $9 billion or more in value for shareholders of the Grayscale Bitcoin and Ethereum Trusts and realize over a quarter billion dollars in asset value for the FTX debtors' customers and creditors. The lawsuit claims that Grayscale charged over $1.3 billion in management fees in violation of trust agreements, and "contrived excuses" to prevent shareholders from redeeming their shares in what the statement described as a "self-imposed redemption ban." As a result, the statement continued, the Trusts' shares trade "at approximately a 50% discount to Net Asset Value."

"Grayscale could allow redemptions: It could let people come to it with shares and give them back a proportional amount of the Bitcoins in the pot; it could let people hand in shares worth $11.77 and give them back $20.33 worth of Bitcoin. It has not done this due to fairly technical securities-law concerns: Regulation M under the US securities laws prohibits someone involved in a "distribution" of shares from buying those shares during the distribution. Because the Grayscale Bitcoin Trust is constantly "distributing" shares, in the sense that anyone could go to them tomorrow with Bitcoins and get back new shares (even though no one has done that in two years), Grayscale doesn't want to also redeem shares, because that could be a Regulation M violation."

Grayscale Investments announced that NYSE Arca has filed with the SEC to convert its Grayscale Bitcoin Trust flagship product into a Bitcoin Spot ETF. However, despite the SEC's allowance of a futures-based ETF, it has yet to let a spot ETF through, citing concerns of market manipulation in spot venues. But Grayscale argues that if a regulator is comfortable with a derivative, it follows that it must be comfortable with the underlying asset.

Grayscale Investments' application to convert its $13.5 billion Grayscale Bitcoin Trust (GBTC) into a spot-based bitcoin exchange-traded fund (ETF) was denied by the U.S. Securities and Exchange Commission (SEC), because the application failed to answer questions about preventing market manipulation, as well as other concerns. Consequently, Grayscale immediately launched a law suit asking the U.S. Court of Appeals for the District of Columbia Circuit to review the SEC's rejection order, alleging that the SEC is failing to apply consistent treatment to similar investment vehicles that it has approved like futures-based bitcoin ETFs, and is therefore in violation of the Administrative Procedure Act and Securities Exchange Act of 1934.

Hours after announcing a stock buyback aimed at shoring up its price, Grayscale Bitcoin Trust has suspended all new buy-ins. The digital asset management firm Grayscale Investments announced on March 10 that it plans to buy $250 million of its own GBTC shares, which have traded as much as 15% below the price of the Bitcoins it holds.

The Grayscale Bitcoin Trust has added another 2,172 Bitcoin to its reserves-worth roughly $82.5 million-in just one day. This amounts to nearly two and a half days' worth of Bitcoin mining. Grayscale now has over $26 billion in crypto under its management.

Grayscale accumulated 16,244 Bitcoin worth more than $600 million on January 18, 18 times more than miners added to the supply that day. According to Bybt.com data, Grayscale's total crypto assets under management exceeds $27 billion when Bitcoin crossed $37,000. In Q4 2020 institutional investors accounted for 93% of capital inflows, or $3.0 billion. Grayscale is also slowly accumulating other digital assets including Bitcoin Cash and Litecoin.

According to Coinshares inflows into crypto investment funds (like Grayscale, 3iQ, and 21Shares) last week reached $1.3 billion - a new weekly high. Grayscale is number with over $26 billion in assets under management, about $21.6 billion in the Grayscale Bitcoin Trust (GBTC).

Grayscale has incorporated six more trusts, tied to Polkadot (DOT), Aave (AAVE), Monero (XMR), Cardano (ADA), Cosmos (ATOM), and EOS.IO (EOS). All the six trusts were formed Wednesday by Delaware Trust Company, Grayscale's "statutory trustee." The new trust formations come a week after Grayscale incorporated [six more trusts, including those tied to Chainlink (LINK) and Tezos (XTZ) tokens]. However, trust formations do not mean the firm will launch these products.

Grayscale has 10 funds and currently manages $25 billion in crypto-assets, up from $2 billion a year ago. The Grayscale Bitcoin Trust has accumulated more than 3% of the total Bitcoin supply, and it is seeing participation broaden out of the hedge fund segment to other institutions, pensions and endowments. Grayscale's funds operate as trusts that hold growing hoards of crypto-assets that are not redeemable by investors. Holders can sell their shares in most of the trusts in the secondary market.

The Grayscale Bitcoin Trust (GBTC) discount continues to shrink amid a wave of U.S. exchange-traded fund (ETF) applications. Grayscale has attempted to convert GBTC from a closed-end fund into an ETF to enable redemptions at bitcoin's market price, but the U.S. Securities and Exchange Commission (SEC) has denied approval so far. The inability of investors to redeem GBTC is the primary reason for the GBTC discount. However, BlackRock's Bitcoin ETF filing on June 16 revived the market's hope around ETF approvals.

Grayscale, the asset manager running the world's largest bitcoin fund, said that it won't share its proof of reserves with customers. "Due to security concerns, we do not make such on-chain wallet information and confirmation data publicly available through a cryptographic proof-of-reserve, or other advanced cryptographic accounting procedure." As I mentioned yesterday, the market value of Grayscale's $10.5 billion Bitcoin Trust (GBTC) is trading at record low discounts to the price of Bitcoin (BTC). Grayscale said each of its digital asset products is set up as a "separate legal entity" and reiterated that those digital asset products are "stored under the custody of Coinbase Custody Trust Company that the "laws, regulations, and documents that define Grayscale's digital asset products prohibit the digital assets underlying the products from being lent, borrowed, or otherwise encumbered."

The discount on the Grayscale Bitcoin Trust (GBTC) has narrowed to its lowest levels since July 2021. Data from YCharts shows the trust's discount to its net asset value (NAV) is 10.35% versus the almost 50% during the depths of the FTX-induced crypto winter in December last year. The shrinking comes amid reports that the US Securities and Exchange Commission (SEC) has engaged in discussions with Grayscale Investments regarding the conversion of the trust into a spot Bitcoin exchange-traded fund (ETF).

Grayscale Investments has tapped Coinbase Custody to act as the custodian for Grayscale's single-asset and diversified investment products. Coinbase qlrready holds $1b in assets, and Grayscale holds $2.7b in total assets under management.

Grayscale Investments believes the introduction of the proposed EIP-1559 fee and burn mechanism could create "a positive feedback loop for Ether's price" should network activity continue to increase on Ethereum. That's because the proposal could result in Ether being burned at a rate exceeding the creation of new supply, leading to an increase in the unit price of Ether because each unit would need to satisfy a greater proportion of economic activity. https://grayscale.co/insights/valuing-ethereum-2021/

Grayscale Investments filed a Registration Statement on Form 10 with the U.S. SEC on behalf of Grayscale Bitcoin Trust. If the SEC deems the Form 10 filing effective, the Trust's shares would be registered under the Exchange Act of 1934, potentially making it the first crypto-asset investment vehicle to become a reporting company. The shares are already publicly traded on an over-the-counter market, but reporting company status would improve transparency and liquidity for shareholders, which could potentially attract investors who are currently restricted from participating in any investment vehicles that aren't SEC-regulated reporting companies.

Grayscale Investments bought up to 33% of all newly minted bitcoin over the last three months, as the asset manager continues to stockpile major crypto-assets. In April 2020, Grayscale reported that the it was holding about 1.7% of all of Bitcoin's supply. Grayscale's total assets under management hit $3.8 billion up 80% since May 2019.