Major crypto asset management firm Grayscale has partnered with America’s oldest bank, New York Mellon (BNY), to activate a series of exchange-traded fund (ETF) services on its highly-renowned Bitcoin (BTC) Trust product. This development reinforces Grayscale’s efforts to grasp its ETF aspirations, which was initially announced last April.
As per the announcement this Tuesday, BNY Mellon is set to provide Grayscale Bitcoin Trust (GBTC) with administration and fund accounting services starting October 1. Furthermore, once GBTC successfully transforms into a sanctioned ETF, BNY Mellon would be the one to supply its ETF-based services as its official transfer agency.
According to Grayscale CEO Michael Sonnenshein, partnering with BNY Mellon represents a crucial milestone towards Grayscale’s commitment to convert its flagship investment product into an ETF. BNY Mellon’s head of digital, Roman Regelman, corroborated this by stating that Grayscale to BNY Mellon is the key to capitalize on its surging digital asset capabilities and broader marketing strategies.
While that may be the case, the newly signed agreement by the two parties aims explicitly to improve GBTC’s present scalability, automation, and resiliency capabilities.
Once GBTC officially becomes a BTC ETF, Grayscale would have the opportunity to charge much lower management fees, making it that much easier to move monetary assets in and out of the particular fund. As it currently stands, Grayscale charges a staggering annual management fee of precisely 2%, all the while forcing institutional investors to lock up their BTCs for nothing less than six months, rendering their outstanding investments highly illiquid, and thus explains the firm’s intensifying push for an ETF.