Cryptocurrency asset management company Grayscale (GRAY.US) applies for IPO, maintaining strong cash flow despite declining revenue.

Grayscale Investments Inc., a cryptocurrency asset management company, has publicly filed for an initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC), becoming one of the representative companies in the cryptocurrency industry to test the capital market again in a more friendly digital asset policy environment. The company had secretly submitted its application in July this year, and the public filing shows that it is accelerating the listing process. According to the filing, Grayscale reported $318.7 million in revenue in the first nine months ending September 30, a decrease of about 20% from the same period last year, which had $397.9 million in revenue. The net profit was $203.3 million, slightly lower than the $223.7 million in the same period last year. Despite a slight decline in profits year-on-year, the company still maintains strong cash flow and profit capabilities. With the end of the U.S. government shutdown, the IPO market is expected to see a wave of concentrated filings at the end of the year. However, due to the SEC review process and holiday restrictions, the remaining window time in 2025 is limited, so the actual number of companies that can complete the listing is expected to be few. Grayscale, headquartered in Stamford, Connecticut, is a subsidiary of Digital Currency Group, founded by billionaire Barry Silbert. In a founder's letter, he stated that compared to single token ETFs or purely digital asset reserve products on the market, the Grayscale product portfolio has a diversified exposure and disciplined cost management. He believes that the trend of tokenization in asset classes like private credit and real estate is accelerating, similar to the early growth path of the cryptocurrency industry. Founded in 2013, Grayscale was one of the first institutions to launch investment products in Bitcoin and Ethereum. In 2023, it won a major lawsuit, successfully transforming its Grayscale Bitcoin Trust (GBTC.US) into an ETF that allows direct investment in Bitcoin. This transformation has driven industry changes and created opportunities for other asset management companies to launch Bitcoin ETFs. The total size of Bitcoin ETFs in the U.S. currently reaches $169 billion, attracting over $25 billion in net inflows this year. However, the longstanding product Grayscale Bitcoin Trust has seen continuous outflows: over $21 billion net outflows last year, and $3 billion so far this year. Analysts attribute this to the fund's high 1.5% fee. To compete, Grayscale introduced the low-fee Bitcoin Mini Trust ETF (BTC.US) last year, with a fee rate of only 0.15%, currently managing assets of around $5 billion. Against the backdrop of soaring cryptocurrency prices at the beginning of the year and the Trump administration's friendly attitude towards the industry, several cryptocurrency companies have announced plans to go public. For example, Gemini Space Station (GEMI.US), supported by the Winklevoss brothers, started trading in September. However, cryptocurrencies have recently experienced a widespread decline, with Bitcoin dropping from a high of $120,000 to around $100,000. Currently, Grayscale's assets under management (AUM) are approximately $35 billion, with over 40 investment products covering more than 45 tokens and around 120 employees. In October this year, Grayscale completed a $250 million convertible preferred stock private placement, which will be used for proprietary capital investments, including the purchase of digital assets or related products. According to the structure, after the IPO, Digital Currency Group will still maintain majority voting rights through its B class shares, which have 10 votes per share. This IPO will be underwritten by Morgan Stanley, Bank of America, Jefferies Financial Group Inc., and Cantor Fitzgerald, with the stock planned to be listed on the NYSE under the code GRAY.