Grayscale seeks to convert its Bitcoin Cash Trust into an ETF

An old fork getting a new lease of life. Bitcoin cash jumped more than 30% in one session this week, driven by futures announced by the CME for October 19. A second motor runs behind the scenes. Grayscale wants to transform its Bitcoin Cash Trust into an ETF listed on NYSE Arca, under the ticker BCHG.

Holders of Grayscale's bitcoin and ether trusts know what this nuance can cost.

Trust or ETF: the difference that cost GBTC holders dearly

A Grayscale trust operates in a closed circuit. It issues a given number of shares backed by cryptos, then these shares are exchanged between investors on the over-the-counter market. There is no mechanism to reimburse them against the underlying cryptos. The price of the share may therefore deviate permanently from the value of the assets held, called net asset value.

An ETF works in the opposite way. Approved intermediaries create or destroy shares according to demand, which constantly brings the price close to the value of the assets.

Holders of the Grayscale Bitcoin Trust (GBTC) learned this the hard way. Long listed at a premium, the fund switched to a discount in 2021. In December 2022, in the middle of the bear market, the share was trading at almost 50% below the value of the bitcoins it represented. Grayscale's Ethereum trust (ETHE) fared worse, with a record discount of around 59% at the end of that same month.

GBTC, ETHE: the legal standoff that opened the way to ETFs

Grayscale ended up taking the matter to court. After the SEC's refusal in June 2022, the company appealed to the federal appeals court for the District of Columbia. On August 29, 2023, the judges unanimously agreed with him and overturned the regulator's decision, as announced by Grayscale. Bitcoin spot ETFs, including GBTC, were launched in January 2024, followed by ether ETFs in July of the same year.

The conversion had its downside. The porters trapped for years were finally able to get out at the right price, and they didn't have to be asked. Faced with much cheaper competitors, GBTC saw its assets fall for months, while BlackRock and Fidelity picked up the stakes.

Bitcoin Cash ETF: a premium that has already reached 1,852%

The Bitcoin Cash trust has seen even more extreme deviations. According to the registration filing filed with the SEC, its shares traded between August 2020 and June 2026 with a maximum premium of 1,852% and a maximum discount of 59%. On September 9, 2026, the share was trading at $1.96, or 5% below its net asset value, compared to a 9% discount at the end of June.

The conversion request was amended on September 11, 2026 to rename the fund Grayscale Bitcoin Cash Trust ETF. A cash ETF should buy bitcoin cash for every dollar raised. CME futures are settled in cash without touching a single BCH. This is why the market reacted so strongly to the two announcements combined.