Grayscale Files Second Amendment for Bittensor Fund as Listing Remains Conditional
Key Facts
Grayscale filed Amendment No. 2 to the S-1 registration statement for its Bittensor fund on October 23, in a move aimed at transferring its shares to NYSE Arca under the GTAO ticker. But the filing does not mean the fund has received listing approval or is ready to trade; it states that the company cannot sell shares before the registration becomes effective. Trading can also begin only after listing requirements are met and the exchange confirms they have been satisfied. The filing comes as market data show TAO at $255.40 on October 23 and $252.60 on October 25. It details the fund’s structure and the mechanics for handling its shares, while regulatory and operational steps remain pending.
Grayscale intends to use NYSE Arca Rule 8.201-E, described in the filing as a generic listing standard, if TAO meets the eligibility requirements. The company says it does not expect the exchange to submit a proposed rule change under Rule 19b-4. That does not eliminate the requirement for NYSE Arca to confirm that all listing requirements have been met before trading begins. The fund intends to change its name to Grayscale Bittensor ETF when the registration becomes effective and the shares are listed. Until then, the GTAO ticker is associated with the existing product, not completion of the proposed exchange listing.
The draft outlines a custody and operating structure spread across several firms: BitGo Bank & Trust as primary custodian and Coinbase Custody Trust Company as additional custodian, while Coinbase serves as prime broker. The Bank of New York Mellon is identified as transfer agent and fund administrator. Shares are issued and redeemed in baskets of 10,000 shares. Baskets may be created and redeemed in kind for TAO, and the fund may also accept cash orders. These arrangements define how the fund would handle custody, brokerage and transfers if it begins operating after satisfying the registration and listing conditions.
The draft does not specify an annual sponsor fee rate; the rate field is blank, while it says the sponsor does not currently intend to waive any portion of the fee. This information is separate from figures for the existing product: its total expense ratio was 2.50% on October 22, according to Grayscale, but that rate applies to the currently traded fund and does not determine the proposed fund’s fee. On the same date, the company reported that the existing product had $16,161,795 in assets and a net asset value of $4.84 per share. Grayscale also said its shares had not reflected the value of the digital assets it held, and had traded at varying premiums and discounts, some of them large. This means that providing exposure through a traded share does not guarantee that its price will match the value of the assets it represents.
The fund aims for its share value to reflect the value of the TAO it holds, after expenses and liabilities, but investing in the shares does not represent a direct investment in the token. The product was already operating and trading over the counter under the GTAO ticker on OTCQX, with shares available through most traditional brokerage accounts, according to the filing and Grayscale data. The new listing path requires the registration to become effective and NYSE Arca approval, and the filing does not establish that the fund will be the first spot TAO fund. The filing describes the Bittensor network as an open, peer-to-peer marketplace for AI outputs that uses Yuma Consensus to evaluate participants’ contributions. The number of active subnets was 127 as of September 30, 2026, while average on-chain transactions were about 80,000 per day.
On the network’s economics, pooled liquidity in alpha token pools was estimated at about 1.9 million TAO on September 30, equivalent to roughly 18% of circulating supply, while the token’s market capitalization was about $3.5 billion. The fund cannot currently stake TAO, according to the draft, which also says there is no affiliated entity able to stake on the network on its behalf. The document points to the possibility of allowing this in the future if specified conditions are met, without giving a timeline. The next steps are therefore for the registration statement to become effective, listing requirements to be met, and NYSE Arca to confirm trading readiness. Any change to the staking policy or fund fees remains subject to future disclosures.