The Grayscale Bitcoin Trust (GBTC) provides a way for investors, both individual and institutional, to gain exposure to bitcoin without the need to directly own and manage the cryptocurrency. GBTC simplifies the process by offering shares that represent ownership of bitcoin, eliminating the complexities involved in owning and trading the digital asset.

Initially limited to institutional and accredited investors, GBTC obtained approval from the SEC in 2020 to operate as a digital currency investment vehicle. Subsequently, in 2024, Grayscale successfully converted GBTC into a spot bitcoin exchange-traded fund (ETF), after receiving approval from the SEC and alongside ten other funds.

GBTC functions similarly to an ETF, allowing institutional investors to participate in the primary market and giving retail investors regulated access to bitcoin in the secondary market. Share prices vary based on market demand, and investors receive GBTC shares in exchange for their capital, which can then be traded on the stock market.

While GBTC provides a straightforward way to invest in bitcoin by bypassing the technicalities of cryptocurrency ownership, it does come with a 1.5% annual management fee that might impact returns, particularly in bear markets. Despite this disadvantage, GBTC's value has shown signs of improvement following regulatory approval to operate as an ETF, indicating a positive shift for investors.