Resources

Founded in 2013, Grayscale has deep expertise as the world’s largest crypto asset manager*. Investors, advisors, and allocators turn to Grayscale’s diverse suite of future-forward investment products to access the digital economy and transformative technologies.

*By AUM as of 9/30/2023

Grayscale is headquartered in Stamford, Connecticut.

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We are happy to answer any questions you have about the crypto industry and Grayscale Products. To do so, please contact us directly here. You can also sign up to receive emails about new Grayscale thought leadership and educational content here.   

Grayscale offers multiple types of investment products, all of which can be found in the All Products page of our website. 

The following FAQs apply to our digital asset investment products only. FAQs about our other products can be found on their respective product pages.

Grayscale’s digital asset investment products (Products) include single-asset trusts, which provide investors with exposure to a singular cryptocurrency, and diversified funds, which provide investors with exposure to a basket of cryptocurrencies. The diversified funds track thematic indices and are rebalanced on a quarterly basis.  

Each Product is intended to follow a four-stage life cycle — with the ultimate goal of uplisting the Product to an ETF*. As a Product progresses through this intended lifecycle, there is a correlated increase in investor access and transparency. 

Stage 1: Private Placement

Grayscale Products first launch as private placements, allowing accredited investors to gain crypto exposure through a familiar investment vehicle structure.

Shares purchased in the private placements are initially restricted for one year.

Stage 2: Public Quotation

Grayscale pioneered obtaining public quotations for unrestricted shares of our private placements. This provides liquidity to existing private placement investors by allowing them to continue to hold their shares in their brokerage account or sell them through their broker in the public market. 

This also allows all investors —accredited or not — to access Grayscale products through certain brokerage or retirement accounts, regardless of investment size or holding period.

Due to the lack of an ongoing redemption program, publicly traded shares may trade premiums or discounts to the value of their underlying assets.

Stage 3: SEC Reporting

Grayscale Products are the first SEC-reporting companies in the industry. The requirements of being SEC-reporting exceed the standard of reporting already met by these Products as OTC Markets public quotations, including heightened levels of disclosure to offer even greater transparency for investors, and subjects the Products to additional regulatory oversight.

This also reduces the initial one year holding period of the private placement to six months.

Stage 4: ETF

While the SEC has not currently approved a spot crypto ETF, Grayscale believes its SEC-reporting Products present a strong case for uplisting when permitted by the U.S. regulatory environment.

In connection with ETF uplisting, products would have ongoing creation and redemptions, and the arbitrage mechanism inherent to ETFs would effectively eliminate premiums and discounts to the value of their underlying assets.

*We use the generic term “ETF” to refer to exchange-traded investment vehicles, including those that are required to register under the Investment Company Act of 1940, as amended (the “‘40 Act”), as well as other exchange-traded products, or “ETPs”, which are not subject to the registration requirements of the ‘40 Act.

*We use the generic term “ETF” to cover exchange-traded investment vehicles that are required to register under the Investment Company Act of 1940, as amended (the “‘40 Act”), also commonly referred to as “exchange-traded funds” or “ETFs”. The term “ETF” also encompasses “exchange-traded products” or “ETPs”, like GBTC would be, that are not subject to the registration requirements of the ‘40 Act. ETFs trade in line with NAV as a result of the simultaneous creation and redemption mechanism available.

What is a private placement?

Shares of Grayscale Products are offered to institutional and individual accredited investors* in private placement transactions exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Rule 506(c) thereunder.

Each Product’s investment objective is for the value of its shares (based on digital assets per share) to reflect the price performance of such Product’s underlying digital asset(s), less fees and expenses.** Modeled after popular commodity investment products, each Product was created for investors seeking exposure to digital assets through a familiar  investment vehicle.

*Grayscale’s private placements are only available to Accredited Investors as defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended. Most individuals are not Accredited Investors. An individual must earn more than $200,000 a year (or $300,000 per year with a spouse or spousal equivalent), have a net worth over $1 million either alone or together with a spouse or spousal equivalent, excluding their primary residence, or hold in good standing their Series 7, Series 65, or Series 82 professional certifications. Entities must have $5 million in liquid assets or all beneficial owners must be Accredited Investors.

**Because each Product does not currently operate a redemption program, there can be no assurance that the value of such Product’s shares will reflect the value of the assets held by such Product, less such Product’s expenses and other liabilities, and the shares of such Product, if traded on any secondary market, may trade at a substantial premium over, or a substantial discount to, the value of the assets held by such Product, less such Product’s expenses and other liabilities, and such Product may be unable to meet its investment objective.

What is a public quotation?

Shares of certain Products are publicly quoted on OTC Markets. Shares that have become unrestricted in accordance with SEC Rule 15c2-11 may be bought and sold by retail investors throughout the day via their brokerage accounts.

Investors of Grayscale’s public quotation Products receive annual and quarterly reports and financial statements pursuant to OTC Markets’ Alternative Reporting Standards (ARS).

What is an SEC Reporting Company?

An SEC reporting company is an issuer of securities that is subject to the periodic and current reporting requirements of the Securities Exchange Act of 1934, as amended (the Exchange Act). 

The Exchange Act contains ongoing disclosure requirements designed to keep investors informed on a current basis of information concerning material changes in the financial condition or operations of the issuer. The requirements include an obligation to file annual reports and financial statements on Form 10-K, quarterly reports and financial statements on Form 10-Q, and current reports on Form 8-K with the SEC. 

For more information, please refer to the SEC public filing documents. 

What is an exchange-traded fund (ETF)? 

ETFs are a basket of assets which can track a particular index, sector, commodity, or other underlying asset, and its shares can be purchased or sold on a national stock exchange. ETFs are able to track the price of their underlying assets because of an arbitrage mechanism which allows market participants to create shares when there is a premium and redeem shares when there is a discount, thus allowing shares of the fund to trade closely in line with their net asset value. 

Per Grayscale’s four-stage Product life cycle, Products are designed to be uplisted to ETFs when permitted by the U.S. regulatory environment. To date, none of Grayscale’s Products have uplisted into ETFs.

Each Product’s investment objective is for the value of its shares (based on digital assets per share) to reflect the price performance of such Product’s underlying digital asset(s), less fees and expenses. Modeled after popular commodity investment products, each Product was created for investors seeking exposure to digital assets through a familiar investment vehicle.

Because each Product does not currently operate a redemption program, there can be no assurance that the value of such Product’s shares will reflect the value of the assets held by such Product, less such Product’s expenses and other liabilities.  The shares of such Product, if traded on any secondary market, may trade at a substantial premium over, or a substantial discount to, the value of the assets held by such Product, less such Product’s expenses and other liabilities, and such Product may be unable to meet its investment objective.

Each Product charges an annual management fee, which includes the costs associated with administration and safekeeping. The fee is charged based on the total amount of tokens underlying the trust, and accrues daily. The ratio of digital asset(s) to shares will decay by this management fee over the course of a year.  We expect this fee to be the only ordinary recurring expense for each Product. There is no performance fee. For further details on each Product’s fees, please review each Offered Product’s Private Placement Memorandum or each Product’s annual and quarterly reports, as applicable.  

Each Product’s assets are stored in offline storage, or “cold” storage, with Coinbase Custody Trust Company, LLC, as (the “Custodian”). The Custodian is a fiduciary under § 100 of the New York Banking Law and a qualified custodian for purposes of Rule 206(4)-2(d)(6) under the Investment Advisers Act of 1940, as amended. 

The SEC has recently released proposed amendments to rule 206(4)-2 that, if enacted as proposed, would amend the definition of a “qualified custodian” under Rule 206(4)-2(d)(6). Executive officers of the Custodian’s parent company have made public statements indicating that the Custodian will remain a qualified custodian under the proposed SEC rule, if enacted as currently proposed. However, there can be no assurance that the Custodian would continue to qualify as a “qualified custodian” under a final rule.

For more information about the Custodian, please visit their site.  

Today, there are many different ways for investors to buy and hold crypto, including through a self-custodied wallet or via a crypto exchange. However, while these methods have become simpler over time, many investors prioritize the ease, accessibility, and familiarity of being able to gain exposure to crypto within their existing portfolios, on platforms where they already do their banking and investing. 

Grayscale Products are familiar investment vehicles that investors can access in major brokerage accounts such as Charles Schwab, Robinhood, and Fidelity, and similar to other retail investments, investors may buy and sell shares of Grayscale Products without needing to manage the crypto underlying it directly.  

You can access Grayscale’s publicly-quoted Products through a brokerage account and through certain tax-advantaged accounts (e.g. IRAs, Self-Directed IRAs). 

To purchase, simply search for the ticker symbol in your brokerage account or investment platform.

If you do not see Grayscale Products available, you may consider consulting your Financial Advisor.

Yes, you can access Grayscale Products in certain tax-advantaged accounts (e.g. IRAs, Self-Directed IRAs). 

For additional information, speak with your IRA or tax-advantaged account provider. Please note that Grayscale does not and will not provide any advice or recommendation regarding investment in any Product and that you should consult your own advisers before making any decision to purchase shares in a Product.

For Products that are single-asset crypto trusts:

Each single-asset crypto trust intends to take the position that it is a grantor trust for U.S. federal income tax purposes. Assuming that such Product is a grantor trust, shareholders generally will be treated as if they directly owned their pro rata shares of the underlying assets held in such Product. Shareholders also will be treated as if they directly received their respective pro rata shares of such Product’s income, and directly incurred their pro rata shares of such Product’s expenses. Most state and local tax authorities follow U.S. income tax rules in this regard. Prospective investors in such Product should discuss the tax consequences of an investment in such Product with their tax advisors.

For Products that are multi-asset crypto funds:  

For U.S. federal income tax purposes, each multi-asset Product may be a passive foreign investment company (a “PFIC”) and, in certain circumstances, may be a controlled foreign corporation (a “CFC”). The Product will make available a PFIC Annual Information Statement that will include information required to permit each eligible shareholder to make a “qualified electing fund” election (a “QEF Election”) with respect to the Product. Each shareholder that is a taxable U.S. person for U.S.  federal income tax purposes is urged to make a QEF Election with respect to the Product. 

This should not be considered tax advice and investors should discuss the U.S. federal income tax consequences of an investment in the Product with their tax advisors, including the consequences to them of an investment in a PFIC or CFC.

All tax documents can be found in the Resources of the Grayscale website.  

Investments in Grayscale Products are considered speculative investments that involve high degrees of risk, including loss of invested funds. Grayscale Products are not suitable for any investor that cannot afford loss of the entire investment.

It is recommended that investors carefully consider each Product’s investment objectives, risk factors, fees and expenses before investing. This and other information can be found in each Product’s private placement memorandum, which may be obtained from Grayscale, and for each Product registered with the SEC and/or listed on the OTC Markets, such Product’s annual report or information statement, which may be obtained by visiting the SEC’s website for Products that are SEC reporting or the OTC Markets website for Products that are quoted on OTC Markets. Reports on OTC Markets are not prepared in accordance with SEC requirements and may not contain all information that is useful for an informed investment decision. Read these documents carefully before investing.