Grayscale Investments filed a registration statement on Form S-1 with the SEC on December 30 for the Grayscale Bittenseur Trust ETF, looking to transition its existing over-the-counter product to a listing on NYSE Arca under the symbol GTAO.
The deposit allows Grayscale to offer regulated exposure to TAO, the native token of Bittensor’s decentralized AI marketplace, through a passive investment vehicle holding digital assets valued at $7.97 million as of December 31.
The trust currently trades on OTCQX with 1.88 million shares outstanding and charges a total expense ratio of 2.5% while maintaining 0.0192 TAO per share.
Grayscale structured the product as a Delaware statutory trust established in April 2024, with shares issued in baskets of 10,000 units exclusively through authorized participants who create or redeem holdings using either in-kind TAO deposits or cash orders executed by liquidity providers.
Hybrid creation mechanism targets institutional access
The filing details two distinct order types allowing authorized participants to facilitate the creation and redemption of shares.
In-kind orders allow brokers to deposit TAO directly into BitGo’s vault or withdraw assets during redemptions.
In contrast, cash orders use Coinbase as the primary broker to execute purchases on behalf of participants through separate accounts.
Cash transactions use either variable fee structures, in which liquidity providers absorb price differentials, or actual execution orders which impose price risk on authorized participants between the NAV on the trade date and the final settlement values.
The Trust calculates NAV daily at 4:00 p.m. (Eastern Time) using the CoinDesk TAO CCIXber benchmark rate, with cascading backup protocols that default to the Coin Metrics real-time rate or Coinbase spot pricing if the main index becomes unavailable.
BNY Mellon serves as trustee and transfer agent, while Coinbase Custody Trust Company manages custody of the digital assets alongside BitGo, although the trust currently prohibits staking activities pending IRS guidance on the tax treatment of licensor trusts.
Grayscale has committed to irrevocably relinquishing rights to tokens from network forks or airdrops in order to preserve the tax classification of the structure, potentially losing future value from protocol upgrades.
European ETP Wave Signals Wider Competition for Altcoin ETFs
The Grayscale filing comes as Deutsche Digital Assets and Safello launched the Safello Bittensor Staked TAO ETP on SIX Swiss Exchange in October, providing 1.49% fee exposure to staking rewards via the Kaiko Safello Staked Bittensor Index.
This product attracted immediate institutional interest, as TAO rose 42% in October to $427.59, although the token has since declined to its current levels amid broader year-end outflows in the crypto market.
Bitwise files 11 crypto strategy ETFs with the SEC targeting DeFi, Layer-2 and privacy protocols for NYSE Arca trading.#bitwise #ETFhttps://t.co/4lfgX8jyOM
– Cryptonews.com (@cryptonews) December 31, 2025
Bitwise files 11 crypto strategy ETFs with the SEC targeting DeFi, Layer-2 and privacy protocols for NYSE Arca trading.Bitwise simultaneously filed eleven strategy-based crypto ETFs on December 30, including a dedicated TAO product alongside protocol tracking funds AAVE, UNI, NEAR, SUI, STRK, ZEC, ENA and others.
The wave of requests follows the SEC’s October 2025 introduction of generic listing standards, which eliminated case-by-case approval requirements and accelerated institutional product launches in formerly restricted altcoin markets.
Speaking to Cryptonews, Ray Youssef, CEO of NoOnes, noted that altcoin ETF launches are “facing tight liquidity, low investor confidence and pronounced market underperformance,“but claimed new inscriptions”create a stable entry channel that can serve as a liquidity buffer.»
At the end of 2025, XRP ETFs recorded six consecutive days of inflows exceeding $420 million, while Solana products attracted $2.29 million on December 31, even as Bitcoin and Ethereum ETFs recorded combined outflows of $420 million during that session.
Despite immediate market headwinds, Grayscale’s record positions the company to capture institutional demand once macroeconomic conditions stabilize.
The trust’s net asset value declined 51.6% year over year to $4.24 per share as of December 31, trading at a 124% premium to the market price net asset value of $9.50.
Notably, the filing revealed risks including TAO’s historical volatility ranging from $188.82 to $709.06 per year, potential SEC classification that could force liquidation, and irreversible custodial losses due to compromised private keys despite multi-signature cold storage protocols in geographically distributed facilities.
The article Grayscale Files for Bittensor Spot ETF under GTAO appeared first on Cryptonews.
