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- GLNK offers exposure to Chainlink but carries high risk and volatility.
- The fund does not follow the same rules as traditional registered ETFs.
- Investors buy shares of a trust, not the LINK token itself.
According to the documents, the Grayscale Chainlink Trust ETF, trading under the symbol GLNK, has entered a new phase with approval for listing on NYSE Arca. The move shifts the product from the OTC market to a national exchange.
The change expands access. It also brings sharper focus on risk, structure, and costs. The trust issues share that reflects the value of Chainlink’s LINK token. These shares aim to track the market price of LINK after expenses.
The fund does not fall under the Investment Company Act of 1940. That status means fewer protections than traditional ETFs and mutual funds. Loss of capital remains a real possibility.
Grayscale Management and Key Service Partners
GLNK is a grantor trust. It issues fractional interests in a trust that represents an ownership interest in assets held by the trust. The trust holds LINK, a digital asset on the Ethereum Network. Its objective is simple.
The value of the shares should reflect the value of the LINK held by the trust, minus fees and liabilities. The sponsor of the trust is Grayscale Investments. The trustee is CSC Delaware Trust Company. The administrator and transfer agent are The Bank of New York Mellon.”
“Coinbase is involved in this in two different ways. It’s involved as a prime broker and as a custodian in its various entities. The trust is an emerging growth company. Being an emerging growth company reduces its reporting obligations. The regulators have not approved or endorsed this product.
It’s up to investors to rely upon the prospectus and make their own judgment. The trust sells its shares continuously. Investors are not buying LINK directly from the trust. They are buying shares that offer exposure to LINK. The authorized participants facilitate creations and redemptions.”
Basket-Based Share Creation and Redemption
Each unit of creation or redemption is made up of blocks of 10,000 shares, called baskets. The trust is also supportive of both in-kind and cash transactions. The process of in-kind transactions utilizes LINK for creating or redeeming shares.
The trust also allows cash transactions to maintain flexibility when market conditions demand it. It determines the value of a basket using the LINK index price, set at 4:00 PM New York time each business day. The index calculates prices from multiple digital asset trading platforms, using CoinDesk’s reference rate.
The gross expense ratio for GLNK is zero percent, but this is only for a period of three months or when assets are valued at one billion dollars, whichever comes first. After this period, the gross expense ratio increases to 0.35 percent.
Risk is a key term for this product, as fluctuations in LINK’s price are quite severe. The investment is not for those who are unable to sustain a total loss, as shares are not a representation of a claim on a sponsor or trustee but rather a representation of assets within a trust.
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