This article is reprinted with authorization from Automatic Insight, author: Rhythm Editorial Department, copyright belongs to the original author.
On November 13, Grayscale submitted its S-1 prospectus to the SEC.
The document shows that this company, claiming to be "the world's largest cryptocurrency asset management company," plans to list on the New York Stock Exchange under the ticker symbol GRAY. As of September 30, 2025, its total assets under management are approximately $35 billion. In the first three quarters of 2025, the company's revenue was $318.7 million, a year-on-year decline of 20%; net profit was $203 million, a year-on-year decline of 9.1%.
Grayscale was once a barometer for Bitcoin prices.
In 2020 alone, Grayscale's GBTC consumed about 346,000 Bitcoins, equivalent to nearly 76% of the new Bitcoins produced that year. At its peak, it could sweep away more than 12,000 Bitcoins in a single day, pushing its assets under management to over $15 billion.
During that phase, Grayscale could almost sway the entire market's sentiment just by buying Bitcoin; now, with $35 billion in existing assets, it stands at the doorstep of the New York Stock Exchange, having to repeatedly prove to Wall Street in its thick prospectus that its valuation can still hold up.
A true sign of an era ending is often not who goes bankrupt in the storm, but when former kings begin to explain to the market how they can still make money like ordinary companies.
Under the new cycle's standards, to put it bluntly, it may still be a profitable old business, but it is hard to call it a "good company" in the true sense.
Today's cryptocurrency financial market has evolved into a completely new food chain, and Grayscale no longer holds the switch to the entrance but must bear the pressure from both ends. This awkward situation is something it could hardly have imagined during the last bull market when it was at its peak.
At the upper level are traditional ETF giants like BlackRock and Fidelity. They bring a kind of dimensionality reduction attack rarely seen in the crypto world: fees low enough to almost touch costs, channels spread to every mainstream brokerage and every retirement account, combined with decades of accumulated brand trust.
For an ordinary American investor, when they open their brokerage app and type "Bitcoin" in the search box, the options that pop up include IBIT, other Bitcoin ETFs, and possibly a stock like MSTR. When they look at the fees, scale, and past year's performance, at the moment of decision, they likely won't think of Grayscale but rather which option is the most stable, convenient, and resembles the index funds they are already familiar with.
When Bitcoin is made into a common asset that "requires no further explanation," Grayscale's troubles begin. It must constantly explain its reason for existence to the market. It tries to emphasize "professional custody" and "product line breadth." As of September 2025, Grayscale manages over twenty cryptocurrency asset trusts and ETFs, covering a whole basket of assets including Bitcoin, Ethereum, Solana, and XRP. However, in front of these giants, the weight of these cards is visibly diminishing.
At its lower level are another group of more reckless gamblers, represented by companies like MicroStrategy and Metaplanet. Their approach is much more extreme; these companies do one thing: buy Bitcoin, then continuously finance and increase their holdings, tightly binding their stock prices to Bitcoin.
MicroStrategy has taken this path to the extreme, pouring almost all new financing into Bitcoin over the years. By the second half of 2025, it held over 640,000 Bitcoins, with a book value in the hundreds of billions of dollars at current prices. Its stock price is highly correlated with Bitcoin prices, rising more sharply when Bitcoin rises and falling harder when Bitcoin drops, serving a group of investors who know they are gambling and are happy to admit it.
Thus, Grayscale is firmly caught in the middle. For investors who only want cheap and convenient exposure to Bitcoin, its fees are not low enough; for investors looking to make a big bet, its products are not crazy enough. The ETF giants take the "cheap," the DAT companies take the "excitement," and Grayscale is left in the middle, trying to sell a kind of "decent" that lies between the two, a story of "professional custody" and "product line breadth" that is increasingly difficult to articulate.
In the new cryptocurrency financial food chain, Grayscale's position increasingly resembles that of a typical "middle class." Its assets are not insignificant, but its moat is rapidly drying up, being squeezed from both ends, creating a sense of anxiety. It is powerless to compete with the giants on cost and channels; it cannot lower itself to compete with gamblers on craziness and imagination.
To explain Grayscale's awkward position today, one cannot avoid an old question: what did this company rely on to become the "only entrance"?
For a considerable period, if American institutions wanted to "comply" with buying a Bitcoin, there was almost only one path: buy Grayscale's Bitcoin Trust, GBTC.
The structure of GBTC is designed to be very strong. Investors can purchase new shares with cash or Bitcoin but cannot redeem their shares for cash or Bitcoin; newly purchased shares must be locked for 6 months before they can be traded in the over-the-counter market; meanwhile, Grayscale steadily takes a 2% management fee each year.
A large amount of capital was funneled into this closed structure, with water only coming in and not going out, naturally causing the water level to rise. In the secondary market, the price of GBTC long remained above the actual value of the basket of Bitcoins behind it, and this difference is known as the "GBTC premium."
In 2021, the premium became almost the norm, maintaining above 20% for a long time, and at the most frenzied times, it was even pushed close to doubling. During those years, GBTC ranked among the largest commodity ETFs globally, becoming what Wall Street referred to as "digital gold."
Hedge funds quickly found a formula that seemed almost "risk-free" at the time: first borrow Bitcoin, purchase GBTC shares, and when the lock-up period ends, sell the premium-laden shares in the secondary market, then use the dollars from the sale to repay the Bitcoin, pocketing the premium in between. This trading was packaged as "structural Alpha," spreading by word of mouth in Wall Street circles.
During those years, Grayscale did not need to explain the grand future of Web3; it only needed to keep telling anxious capital: there is still capacity in the pool.
Good times did not last long.
In February 2021, the GBTC premium disappeared and turned negative for the first time, meaning it began to trade at a discount. Initially, the market did not pay much attention, with many thinking it was just a short-term fluctuation, and that the premium would naturally return when sentiment improved. But this time, the discount gap kept widening.
With the collapse of FTX and trust evaporating across the industry, the discount rate of GBTC plummeted to nearly 50%. This meant that the GBTC shares in investors' hands were worth only half of the corresponding Bitcoin value in the market. Once a hot commodity, it overnight became a hot potato.
The first to be trapped were those arbitrage funds. Their models failed. Originally expecting to sell GBTC at a high price after 6 months, they found themselves firmly stuck in a massive discount. Selling meant huge losses; not selling meant bearing the dual risks of Bitcoin price fluctuations and the discount continuing to widen.
Hedge fund Fir Tree Capital was the first to strike, suing Grayscale, accusing it of charging excessively high management fees due to its monopoly position and demanding the opening of redemptions to eliminate the discount. Soon after, Alameda Research, already deep in bankruptcy proceedings, also joined the fray, stating in its lawsuit that if Grayscale lowered fees and allowed redemptions, the shares it held could theoretically be worth much more.
The lawsuit revealed a series of hidden landmines beneath the surface. As investigations deepened, people were horrified to discover that GBTC, once considered "high-quality collateral," had become deeply embedded in the most frenzied leverage chains of the last bull market.
Three Arrows Capital held a large amount of GBTC and other Grayscale trust products, using them as collateral for loans; when Three Arrows collapsed, creditors, including crypto lending giant Genesis, found significant GBTC exposure on their balance sheets.
Further down were the Gemini Earn financial products linked to Genesis, with the savings of hundreds of thousands of ordinary American users indirectly tied to this trust. For them, the first encounter with GBTC was not clicking "buy" in a brokerage app but seeing the cold explanation in the bankruptcy notice sent to their homes—your money will be gradually liquidated and repaid through the sale of GBTC.
Faced with lawsuits and a trust crisis, Grayscale did not try to explain how "compliant" it was or how "safe" its structure was; instead, it made an unexpected decision to sue its regulator, the SEC.
For many years, the SEC has been the most stubborn gatekeeper on the road to Bitcoin spot ETFs. It has rejected all companies' applications on grounds of market manipulation and insufficient investor protection. For Grayscale, converting GBTC into an ETF is the only way to structurally resolve the discount; as long as free redemptions are allowed, arbitrageurs will have an exit, and the discount will naturally be gradually erased through trading.
This step is certainly a self-rescue, but the door it knocked on is not just for Grayscale.
In June 2022, after the SEC again rejected its conversion application, Grayscale officially filed a lawsuit. A private company that rose through regulatory loopholes turned around and sued the most powerful financial regulatory agency in the U.S., which at the time seemed more like a gamble with no way out.
On August 29, 2023, the results of the gamble were revealed. The D.C. Circuit Court of Appeals ruled that the SEC, having already approved Bitcoin futures ETFs, could not reject Bitcoin spot ETFs without providing a reasonable explanation, which was deemed "arbitrary and capricious."
The ruling sent shockwaves through the entire crypto world; it was a milestone victory. Grayscale single-handedly opened the door to Wall Street's main battlefield for Bitcoin, becoming the dragon-slaying warrior.
However, the climax of the story often marks the beginning of a turning point.
On January 10, 2024, under court pressure and market expectations, the SEC approved the listing applications for 11 Bitcoin spot ETFs in one go, which began trading the next day. Grayscale's GBTC also successfully completed its conversion from trust to ETF, and the discount was almost erased overnight.
For the funds trapped in the structure, this was a long-overdue exit; however, for Grayscale, the opening of this exit came a bit too quickly.
In the first two months after the ETF conversion, GBTC saw net outflows exceeding $10 billion; in the first full month, cumulative outflows exceeded $7 billion, with a single-day outflow approaching $600 million at one point. By the end of the year, GBTC's asset size had shrunk from a bull market peak of over $40 billion to just over $20 billion.
Even more fatal, just as Grayscale had finally opened the door for spot ETFs, a group of "barbarians" rushed in.
BlackRock and Fidelity, traditional giants on Wall Street, have lowered their fees to the range of 0.2% to 0.3% while expanding their sales networks to every advisory account and every asset allocation sheet. In contrast, Grayscale's insistence on a 1.5% management fee feels out of place. For new investors entering the market, choosing between options may require careful comparison, but not choosing Grayscale is almost a decision that requires no thought.
As a result, while GBTC continues to see outflows, new ETFs like IBIT and FBTC are constantly breaking single-day net inflow records. In just 96 trading days, by the end of May 2024, BlackRock's IBIT surpassed GBTC, becoming the world's largest Bitcoin ETF with nearly $20 billion in assets.
Grayscale opened this door for the industry, only to find that there was no longer a place for itself inside. That lawsuit allowed Bitcoin to step onto Wall Street's shelves for the first time, simultaneously severing Grayscale's reliance on its premium structure and monopoly position.
When the day of the IPO arrives, the ticker GRAY will appear on the massive electronic screen at the New York Stock Exchange. The bell will ring on time as usual, and the management team and early investors will raise their glasses and take photos together. Media members will snap pictures and issue press releases; the entire process will be no different from the IPO of an ordinary fintech company, a consumer goods company, or a manufacturing company.
It is this "no difference" that is most poignant.
Just a few years ago, this company held the key to the cryptocurrency world. It carried the entire industry's ambitions, greed, and imagination through a single trust fund.
Now, it must accept an entirely different set of game rules. It needs to persuade not those institutions willing to pay a premium for a "compliant entry," but a completely different group of investors who may not care about what Web3 is or what a "peer-to-peer electronic cash system" entails. They care about balance sheets, free cash flow, management fees, and the competitive landscape of the industry.
Grayscale's next step is to prove to these individuals that, in the increasingly narrow space squeezed by ETF giants and DAT companies, its machine, caught in the middle of the new order, is still worth being bought by the market.
History will certainly remember Grayscale. It will remember that it was the first threshold for Bitcoin to enter the compliant world and that it pressured regulators to relent in its lawsuit against the SEC. As for how far it can go in the new cycle, that is no longer something Grayscale can decide for itself.
This marks the end of an era and the reality it must face: stepping back from the narrative of being the "only entry" and transforming into an ordinary stock that must continuously persuade the market based on performance, costs, and stories.
The fate of the old entry is mostly like this.
Related: Asset management company Grayscale submits IPO application in the U.S.
Original: “Grayscale, once holding 3% of the world's Bitcoin (BTC), is now headed to ring the NYSE bell”
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