Grayscale Files S-1 to Launch First Bittensor ETF in the US

Key Insights:

• Grayscale has moved to convert its GTAO fund into what would become the first Bittensor ETF.
• The Bittensor (TAO) token quickly bounced back and pushed past $220 to erase earlier losses.
• This registration statement for the Grayscale Bittensor ETF could take effect sometime next year.

Grayscale has moved to convert its GTAO fund into what would become the first Bittensor ETF. If approved, the change would expand the firm’s growing lineup of crypto exchange-traded products.

Once the news broke, the Bittensor (TAO) token quickly bounced back. The price pushed past $220, erased earlier losses, and showed that buyers were stepping in again.

Grayscale Seeks SEC Approval for Bittensor (TAO) ETF

A recent SEC filing shows that Grayscale has submitted a Form S-1 to convert its Bittensor Trust into an ETF. If approved, the fund would become the first ETF to offer institutional investors full spot exposure to the AI-focused token, TAO.

At the same time, the asset manager disclosed plans to list the product on NYSE Arca under the ticker GTAO.

This filing comes shortly after a major milestone for the Bittensor network. On December 14, the network completed its first halving event.

As a result, the issuance of TAO tokens per day decreased from 7,200 to 3,600. That reduction in supply is widely expected to support higher prices for the leading AI token in the period ahead.

According to the crypto ETF S-1 filing, the Bittensor ETF fund will hold the TAO AI token and any other staking earnings. Grayscale also noted in the filing that it will actively implement crypto staking as part of its revenue strategy.

Moreover, the ETF issuer named its transfer agent as the Bank of New York Mellon while the Trust’s primary broker will be U.S. crypto exchange Coinbase. Meanwhile, BitGo will act as a custody provider while ensuring security of the funds.

Grayscale also explained in the filing that NYSE Arca has already secured regulatory approval for the Trust to handle share creations and redemptions through in-kind transactions. Under this structure, authorized participants exchange Bittensor (TAO) directly for shares.

As a result, the Trust is already operating using in-kind orders for both creations and redemptions. That same process is expected to remain in place after the Trust completes its conversion into an ETF.

GTAO Hits the OTCQX Market

The latest Bittensor ETF filing follows the launch of Grayscale Bittensor Trust trading on the OTCQX under the ticker GTAO. That launch followed the SEC’s approval of the Trust’s Form 10 registration.

At the time, Grayscale indicated that clearing the registration process marked an important step toward transforming the product into a fully listed exchange-traded product.

Importantly, the Trust now benefits from a shorter holding period because it is an SEC reporting company. Under this status, the required holding period drops to six months once the Trust has reported for at least 90 days and met the other conditions set out in Rule 144.

Because of this timeline, the registration statement for the Grayscale Bittensor ETF could take effect sometime next year.

The crypto ETF issuer already runs a broad suite of crypto ETFs, giving investors access to assets such as Bitcoin, Ethereum, XRP, Dogecoin, Solana, and Chainlink. In addition, recent reporting showed that the firm updated the S-1 filing for its planned Avalanche ETF, one of several new products in the pipeline.

Bittensor (TAO) jumped to $520 at the start of the year and nearly hit $500 again in November, but much of those gains have since faded.