Grayscale Files for IPO as ETF Outflows Push Its Revenue Lower

Grayscale, the biggest crypto-focused asset management company, has filed to go public with the Securities and Exchange Commission (SEC), joining a few crypto companies that have gone pubic this year.

Grayscale Files for IPO

One of the top crypto news of the day was that Grayscale Investments filed to go public. In a statement, the firm said that it had filed the S-1 document with the SEC and that the ticker symbol will be GRAY. It will list on the New York Stock Exchange (NYSE), possibly by the end of the year or in 2026.

The company is working with Morgan Stanley, Bank of America, Jeffries, and Cantor Fitzgerald as its bookrunners. Other companies participating in the IPO are Canaccord Genuity and Piper Sandler.

Grayscale, which was established by Barry Silbert, has become one of the biggest companies in the crypto industry. It has amassed over $35 billion in assets under management (AUM). It has launched 41 funds, including those tracking coins like Aave, Avalanche, Bitcoin Cash, and Basic Attention Token.

The company has already converted some of its Trust funds into exchange-traded funds (ETFs) to allow exposure to retail investors. It’s the Grayscale Bitcoin Trust (GBTC) ETF, which has an expense ratio of 1.50% is the third-biggest fund in the industry with over $17 billion in assets.

Grayscale also runs the mini trust ETF, which has an expense ratio of 0.15% and $5 billion in assets. The company also runs the second-biggest Ethereum ETF, which has about $3.4 billion in assets.

It also runs Grayscale Solana ETF and has applied to convert most of its other funds into ETFs. There is a likelihood that most of these funds will be approved as the SEC, under Paul Atkins, has become more friendly to the industry.

Grayscale Joins Other Crypto Companies in Going Public

Some prominent companies in the crypto industry have gone public this year, while others have filed. Circle Internet, which operates USDC, was the first main crypto company to go public this year. Its stock initially surged, giving it a market capitalization of over $70 billion. Recently, however, Circle stock has pared back those gains as concerns about its business rose.

Gemini Space Station, the crypto exchange backed by the Winklevoss Twins, also went public. Like Circle, its stock jumped to $46 soon after launch and then plunged to $14, costing investors billions. Bullish, another company that went public, has also plunged from $117 to $45.

Other crypto companies that went public this year that have pulled back are American Bitcoin (ABTC) and Galaxy Digital (GLXY).

Grayscale’s stock price will likely rise and then pull back after its IPO, as its filing showed that its business was not doing well. Its filing showed that it had a net income of $203 million and revenue of $318 million in the first nine months of the year.

The revenue was much lower than the $397 million a year earlier. This decline is mostly because its flagship funds have shed substantial assets as investors rotate to others with lower fees. ETHE, its Ethereum ETF, has shed over $4.8 billion in assets, while GBTC has lost almost $25 billion.