Grayscale Files for Bittensor Spot ETF Under GTAO
Grayscale Investments has taken a significant step towards expanding its offerings in the cryptocurrency market by filing a registration statement on Form S-1 for the Grayscale Bittensor Spot ETF, which aims to list on the NYSE Arca under the ticker symbol GTAO. This move allows Grayscale to provide regulated exposure to TAO, the native token of Bittensor’s decentralized AI marketplace, through a passive investment vehicle. As of December 31, the trust holds $7.97 million in digital assets.
The trust currently trades on the OTCQX with 1.88 million shares outstanding and has a total expense ratio of 2.5%, while maintaining 0.0192 TAO per share. Grayscale structured the product as a Delaware trust, established in April 2024, with shares issued in baskets of 10,000 units exclusively through authorized participants. These participants can either create or repurchase holdings using TAO in-kind deposits or cash orders executed by liquidity providers.
Hybrid Creation Mechanism Targets Institutional Access
The filing outlines two different order types that allow authorized participants to facilitate the issuance and redemption of shares. In-kind orders enable broker-dealers to deposit TAO directly into BitGo’s vault or withdraw assets upon redemptions. In contrast, cash orders use Coinbase as the primary broker to process purchases on behalf of participants through separate accounts. The trust calculates its net asset value (NAV) daily at 4:00 p.m. Eastern Time using the CoinDesk TAO CCIXber reference rate, with cascading backup protocols that default to the Coin Metrics Real-Time Rate or Coinbase spot prices when the primary index is unavailable.
BNY Mellon acts as the administrator and transfer agent, while Coinbase Custody Trust Company, along with BitGo, handles custody of digital assets. However, the trust currently prohibits staking activities pending IRS guidance on the tax treatment of grantor trusts. Grayscale has committed to irrevocably relinquishing rights to tokens from network forks or airdrops to maintain the tax classification of the structure, potentially losing future value from protocol upgrades.
European ETP Wave Signals Broader Altcoin ETF Competition
The Grayscale filing comes as Deutsche Digital Assets and Safello launched the Safello Bittensor Staked TAO ETP on the SIX Swiss Exchange in October, which offers a 1.49% fee risk for staking rewards via the Kaiko Safello Staked Bittensor Index. This product attracted institutional interest as TAO rose 42% to $427.59 in October, although the token has since fallen due to broader year-end crypto market outflows. Bitwise simultaneously filed for 11 strategy-based crypto ETFs on December 30, including a dedicated TAO product as well as funds tracking AAVE, UNI, NEAR, SUI, STRK, ZEC, ENA, and other protocols.
The wave of applications followed the SEC’s introduction of general listing standards in October 2025, which eliminated case-by-case approval requirements and accelerated institutional launches in previously restricted altcoin markets. According to NoOnes CEO Ray Youssef, the launch of altcoin ETFs “collides with tight liquidity, low investor confidence, and pronounced market weakness,” but argued that new listings “create a steady inflow channel that can serve as a liquidity buffer.” At the end of 2025, XRP ETFs recorded inflows of over $420 million for six consecutive days, while Solana products attracted $2.29 million on December 31, and Bitcoin and Ethereum ETFs recorded combined outflows of $420 million in the same session.
Despite immediate market headwinds, Grayscale’s filing positions it to take advantage of institutional demand once macroeconomic conditions stabilize. The trust’s net asset value fell 51.6% year-on-year to $4.24 per share as of December 31 and was trading at a premium of 124% to net asset value at a market price of $9.50. The filing disclosed risks including TAO’s historical volatility between $188.82 and $709.06 per year, a potential SEC classification that could force liquidation, and irreversible custody losses from compromised private keys despite multi-signature cold storage protocols in geographically dispersed facilities.
For more information on Grayscale’s filing and the broader altcoin ETF market, visit https://cryptonews.com/news/grayscale-files-for-bittensor-spot-etf-under-gtao/
