Introduction
Grayscale Investments, the $35 billion crypto asset manager, has filed with the SEC to list its Class A common stock on the New York Stock Exchange under ticker symbol GRAY. The move will subject the firm to greater financial disclosure and shareholder scrutiny while preserving Digital Currency Group’s controlling voting power through a dual-class share structure. This transition comes as Grayscale faces revenue pressure from increased competition in the crypto ETF space, with management fees declining and assets under management slipping year-over-year.
Key Points
- Digital Currency Group will retain approximately 70% voting control through Class B shares with 10 votes each versus one vote per Class A share
- Revenue declined to $318.7 million for nine months ended September 2025, down from $397.9 million in the prior year period, reflecting competitive fee pressure
- The IPO includes a directed share program allowing eligible GBTC and ETHE investors to participate, with purchased shares facing no lock-up restrictions
Financial Performance Under Pressure
Grayscale’s financial metrics reveal a company navigating competitive headwinds as it prepares for public markets. For the nine months ended September 30, 2025, the company reported revenue of $318.7 million, down significantly from $397.9 million in the same period of 2024. Net income followed a similar trajectory, declining to $203.3 million from $223.7 million year-over-year. The full-year 2024 results showed revenue of $506.2 million and net income of $282.1 million, both down from 2023 levels of $512.7 million and $325 million, respectively.
The company’s weighted-average management fee declined to 1.39% through September 2025 from 1.67% in the prior-year period, reflecting intense competitive pressure from lower-cost ETF entrants including BlackRock and Fidelity. Despite the revenue challenges, Grayscale maintained strong operational efficiency with an operating margin of 65.7% in the recent nine-month period. Average assets under management slipped to $30.6 billion from $31.8 billion year-over-year, indicating the competitive landscape is affecting both fee structures and asset retention.
Dual-Class Structure Preserves DCG Control
The IPO employs a dual-class share structure that ensures Digital Currency Group, Grayscale’s parent company, maintains firm control post-listing. Class B shares held by DCG carry 10 votes per share compared to just one vote per Class A share available to public investors. This arrangement will leave DCG with approximately 70% of total voting power after the IPO, despite the Class B shares carrying no economic rights.
This structure qualifies Grayscale as a ‘controlled company’ under NYSE rules, exempting it from certain corporate governance requirements that typically apply to publicly traded companies. The super-voting rights for Class B shares will terminate only when DCG’s ownership falls below 20% of total shares outstanding. The filing does not specify share count or pricing range for the proposed offering, with Morgan Stanley, BofA Securities, Jefferies, and Cantor serving as lead managing bookrunners.
Impact on ETF Investors and Operations
The IPO represents a significant ownership transition without fundamentally altering the operations of Grayscale’s core products. The company manages approximately $35 billion across more than 40 crypto products, including the prominent spot Bitcoin ETF (GBTC) and Ethereum Trust ETF (ETHE). Importantly, the IPO does not change the legal structure, custody arrangements, or operations of these existing trusts and ETFs, with fund assets remaining held by third-party custodians under separate trust agreements.
Net proceeds from the offering will be used to purchase membership interests from existing owners in Grayscale Operating rather than funding capital expenditures or altering sponsor fee arrangements. Grayscale has reserved a portion of IPO shares for eligible investors in its Bitcoin Trust ETF (GBTC) and Ethereum Trust ETF (ETHE) through a directed share program. Participants must have held GBTC or ETHE shares as of October 28 and complete pre-registration by November 24, though the program does not guarantee allocations and shares purchased through it face no lock-up restrictions.
The public listing will subject Grayscale to quarterly and annual reporting requirements, providing ETF investors with increased visibility into the sponsor’s financial condition, litigation exposure, and product concentration. While the transaction converts private ownership stakes into publicly tradable equity without requiring new capital injection into fund operations, future fee decisions and product expansion plans will now face scrutiny from public equity holders alongside existing competitive pressure in the ETF market.
📎 Related coverage from: cryptoslate.com