Grayscale Bitcoin Cash Trust (BCH)

Bitcoin Cash Trust

Entity and purpose

• Operates as a trust that holds Bitcoin Cash (BCH) on behalf of investors.
• Issues Shares intended to provide exposure to BCH price movements; the Sponsor acts on behalf of the Trust.
• Shares are intended to reflect BCH price movement via an Index Price, with NAV per Share used as a reference value.

Product structure

• The Trust’s BCH holdings are maintained by third-party service providers; the Trust relies on those providers for custody and related services.
• There is no ongoing redemption program and a holding period under Rule 144 applies. That structure reduces opportunities for continuous arbitrage linking the Shares’ market price to the Index Price or NAV.
• Shares may trade at a premium or discount to NAV, driven by creation/redemption dynamics and non-concurrent trading hours.

Market and asset exposure

• Shares provide exposure to BCH, a digital asset with limited price history and high volatility.
• Share value depends on BCH market price and broader developments in the digital asset ecosystem, including network technology, user/developer/miner activity, and potential malicious activity.
• BCH and other digital assets trade on digital asset trading platforms that may have limited regulatory oversight and that can face fraud, market manipulation, security failures, or liquidity shortfalls.
• Forks or clones of BCH could affect the value of the Shares.

Regulatory and operational risk

• Changes in securities-law treatment of BCH or in the legal status of BCH transactions could affect Share value and Trust operations.
• Regulatory actions or laws that prohibit or restrict BCH use or related activities could increase costs, require operational changes, or force termination of the Trust.
• Regulators could subject parties involved (for example, Authorized Participants, the Trust, or the Sponsor) to additional regulation—such as money services business or money transmitter requirements—which could raise costs and reduce liquidity.
• Future tax treatment of digital assets could adversely affect the Shares’ value.

Conflicts of interest and governance

• Conflicts may exist between the Sponsor (and its affiliates) and the Trust, because the Sponsor has no fiduciary duties beyond those specified in the Trust Agreement.
• The Sponsor’s continued provision of services is not guaranteed; termination or discontinuation of those services could harm the Trust.

Market structure and liquidity considerations

• Shares trade on venues such as OTC Markets and digital asset trading platforms; non-concurrent trading hours can create price divergence from the NAV or Index Price.
• In the absence of an effective arbitrage mechanism and with reliance on external service providers, investors may face wider price variance and increased liquidity risk.

Summary takeaway

The Trust issues Shares that provide exposure to BCH and use an index- and NAV-based pricing framework. The structure depends on third-party custody and faces risks from BCH volatility, regulatory and tax changes, market structure and liquidity constraints, and potential conflicts of interest between the Sponsor and the Trust.