FAQs

These FAQ’s are qualified in all respects by the information in Grayscale® Bitcoin Trust’s Annual Report, including the Risk Factors therein, which is available at OTC Markets.

The Basics: Bitcoin

What is Bitcoin?

Bitcoin is a type of digital currency that exists on the Bitcoin network.

What is the Bitcoin Network?

The Bitcoin network is a decentralized network of computers that operates on cryptographic protocols. No single entity owns or operates the Bitcoin network, the infrastructure of which is collectively maintained by a decentralized user base. The Bitcoin network allows people to exchange tokens of value, called bitcoin, which are recorded on a public transaction ledger known as a blockchain.

What is a Blockchain?

A blockchain is a public transaction ledger that records digital currency transactions (called “blocks”). The Bitcoin blockchain is the blockchain that records bitcoin transactions on the Bitcoin network.

The Basics: Gold

What is Gold?

Gold is a metal that has historically served as a store-of-value.

What is the #DropGold campaign?

Grayscale Investments launched their #DropGold campaign on Wednesday, May 1, 2019. #DropGold is our ad campaign which focuses on the emergence of Bitcoin as an alternative to investing in gold. It’s not only about building awareness around Grayscale and GBTC, but also about the emergence of digital currencies as a viable asset class. The campaign aims to shift the mindset around modern investment opportunities and portfolio allocations. For more information about our campaign, please visit dropgold.com.

The Basics: Grayscale

What is Grayscale?

Grayscale Investments is the largest digital currency asset manager. With approximately $2.0B AUM,* Grayscale provides opportunities for investors to gain exposure to digital currencies.

Grayscale’s investment products are available to institutional and accredited individual investors through their respective private placements. Grayscale’s single-asset investment products provide exposure to Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Horizen (ZEN), Litecoin (LTC), Stellar Lumens (XLM), XRP, and Zcash (ZEC). Grayscale’s diversified investment vehicle, Grayscale Digital Large Cap Fund, provides exposure to the top digital currencies by market capitalization.

Additionally, Grayscale® Bitcoin Trust (OTCQX: GBTC), Grayscale® Ethereum Trust (OTCQX: ETHE), and Grayscale® Ethereum Classic Trust (OTCQX: ETCG) are publicly-quoted and available to all individual and institutional investors.

*As of December 31, 2019

Grayscale Bitcoin Trust Form 10

These FAQs are qualified in all respects by information in the Grayscale® Bitcoin Trust (the “Trust”) Registration Statement on Form 10 filed with the Securities and Exchange Commission (the “SEC”) pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including the Risk Factors therein. For more information, please refer to the public filing.

For more information on the Trust, please visit https://grayscale.co/bitcoin-trust/.

What is Form 10?

Form 10 is one type of form registration statement used to register securities pursuant to the Exchange Act and thus make an issuer an SEC Reporting Company. Grayscale has filed a Form 10 on behalf of the Trust.* This is a voluntary filing that is subject to SEC review. If deemed effective, it would designate the Trust as an SEC Reporting Company and register its shares pursuant to Section 12(g) the Exchange Act.** It would also designate the Trust as the first digital currency investment vehicle to attain the status of a reporting company by the SEC.

*The Grayscale Bitcoin Trust Private Placement is offered on a periodic basis throughout the year to accredited investors and is currently closed. Because the Trust’s private placement does not currently operate a redemption program, there are no assurances that the value of the Shares will approximate the value of the underlying assets held by the Trust when traded on a secondary market, like OTCQX. As such, the shares of the public quotation may trade at a substantial premium over, or substantial discount to, the value of the Bitcoin held by the Trust.
**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.

What is an SEC Reporting Company?

An SEC Reporting Company is an issuer that is subject to the periodic and current reporting requirements of 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 on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the SEC. 

For comparison, any other public company or public fund from Apple to SPDR Gold Trust similarly is required to file periodic reports on Form 10-K and Form 10-Q, and current reports on Form 8-K with the SEC. 

Currently, investors of the Trust receive annual and quarterly reports and financial statements pursuant to OTC Market’s Alternative Reporting Standards (ARS). Should the Form 10 go effective, investors of the Trust will instead receive 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.

What does it mean for the Form 10 to “go effective”?

To “go effective” means the Trust has become an SEC Reporting Company and the reporting obligations and other changes described below can begin.

How will holders of shares of symbol: GBTC purchased on the public market be affected if the Form 10 is deemed effective?

Trust Reporting: The Trust has published quarterly and annual reports as well as audited financial statements pursuant to OTC Market’s Alternative Reporting Standards (ARS) since its inception in September 2013. Should the Form 10 go effective, the Trust would file these reports and financial statements as 10-Qs and 10-Ks with the SEC, along with current reports on Form 8-K, in addition to complying with all other obligations under the Exchange Act.

Beneficial Ownership Reporting: Shareholders who acquire more than 5% of the outstanding shares of the Trust will be required to file beneficial owner reports on Schedule 13D or 13G (depending on facts and circumstances) pursuant to Section 13 of the Exchange Act until their holdings drop below 5%. 

Transaction Reporting: Shareholders who own more than 10% of the outstanding shares of the Trust will be required to report transactions involving the shares on Forms 3, 4, or 5 pursuant to Section 16 of the Exchange Act.

Fees: There will be no change to the annual fee.

How will holders of the Grayscale Bitcoin Trust private placement shares be affected if the Form 10 is deemed effective?

Holding Period Reduction: The current 12 month holding period under Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”) will be reduced to 6 months.***

For example, if the Form 10 goes effective on January 1, 2020, on March 31, 2020 (90 days later), any private placement investors who have held their shares for at least 6 months (regardless of when they invested) will be able to sell their shares.

Trust Reporting: The Trust has published quarterly and annual reports as well as audited financial statements pursuant to the OTC Markets Alternative Reporting Standards (ARS) since its inception in September 2013. Should the Form 10 go effective, the Trust would file these reports and financial statements as 10-Qs and 10-Ks with the SEC, along with current reports on Form 8-K, in addition to complying with all other obligations under the Exchange Act.

Beneficial Ownership Reporting: Shareholders who acquire more than 5% of the outstanding shares of the Trust will be required to file beneficial owner reports on Schedule 13D or 13G (depending on facts and circumstances) pursuant to Section 13 of the Exchange Act until their holdings drop below 5%. 

Transaction Reporting: Shareholders who own more than 10% of the outstanding shares of the Trust will be required to report transactions involving the shares on Forms 3, 4, or 5 pursuant to Section 16 of the Exchange Act.

Fees: There will be no change to the annual fee. 

***The holding period reduction would become effective after the Trust has been a reporting company for at least 90 days and has satisfied the other requirements under Rule 144 of the Securities Act.

Where can I find more information?

For more information, please refer to the public filing or contact us at [email protected].