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CORRESP
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CORRESP

 Dan Gibbons

 +1 212
450 3222

 dan.gibbons@davispolk.com

 Davis Polk & Wardwell LLP

450 Lexington Avenue
New York, NY 10017

 davispolk.com

 April 12, 2024

Re:
 Grayscale Bitcoin Trust (BTC)

 
 Preliminary Information Statement on Schedule 14C

 
 Filed March 22, 2024

 
 File No. 001-41906

David Lin

 Justin Dobbie

Division of Corporation Finance

 Office of Crypto Assets

U.S. Securities and Exchange Commission

 100 F Street, N.E.

Washington, D.C. 20549

 Dear Mr. Lin and Mr. Dobbie:

 On behalf of our client, Grayscale Investments, LLC, a Delaware limited liability company and the sponsor (the “Sponsor”) of Grayscale Bitcoin
Trust (BTC) (the “GBTC Trust”), this letter sets forth the Sponsor’s responses to the comment letter of the staff (the “Staff”) of the Division of Corporation Finance of the Securities and Exchange Commission (the
“Commission”) dated April 5, 2024, relating to the GBTC Trust’s Preliminary Information Statement on Schedule 14C. The Sponsor has revised the Preliminary Information Statement on Schedule 14C and is filing Amendment No. 1
to the Preliminary Information Statement on Schedule 14C (the “Information Statement”) together with this response letter.

 For your
convenience, we have reproduced the Staff’s comments preceding the Sponsor’s responses below. All capitalized terms used and not defined herein shall have the meaning given to them in the Information Statement. Where applicable, we also
make reference to the registration statement on Form S-1 (333-277837) filed by Grayscale Bitcoin Mini Trust (BTC) (the “BTC Trust”) on March 12, 2024, as
amended from time to time (the “BTC Trust Registration Statement”), which is incorporated by reference in the Information Statement.

Preliminary Information Statement on Schedule 14C

General

1.
 Please tell us how you considered the guidance in Article 11-01(a)(7-8) of Regulation S-X and if you intend to provide pro forma financial information giving effect to the Spin-off,
including consideration of SAB Topic 1.B.2 and SAB Topic 5.Z.7.

 Response

The Sponsor acknowledges the Staff’s comment, and confirms that it has considered the guidance in Article
11-01(a)(7-8) of Regulation S-X regarding the requirements on presentation of pro forma financial information, as well as Staff
Accounting Bulletin Topic 1.B.2 (“SAB 1.B.2”) and Staff Accounting Bulletin Topic 5.Z.7 (“SAB 5.Z.7”). Although the Sponsor believes that no pro forma financial information is required pursuant to Article 11-01(a)(7) or (8) of Regulation S-X, as a pro forma financial presentation is not necessary to reflect the operations of the BTC Trust as an autonomous entity, or any
other significant changes which would not be readily apparent as a result of other disclosures in the Information Statement, the Sponsor has revised the disclosure on pages 21-22 of the Information Statement, and on pages 60-65 of the BTC
Trust Registration Statement (which is incorporated by reference in the Information Statement), to include pro forma financial information of the BTC Trust giving effect to the Initial Distribution in response to the Staff’s comment.

 The Sponsor advises the Staff that no pro forma financial information of the GBTC Trust
giving effect to the Initial Distribution is or will in the future be required to be presented by the GBTC Trust. The Sponsor notes that Article 11-01(a)(4) of Regulation
S-X requires the filing of pro forma financial information when the disposition of a significant portion of a business either by sale, abandonment or distribution to shareholders by means of a spin-off, split-up or split-off has occurred or is probable and such disposition is not fully reflected in the historical financial
statements. Per Article 11-01(b)(2) of Regulation S-X, a business disposition will only be considered “significant” if the business disposition meets the
definition of a significant subsidiary in Rule 1-02(w) of Regulation S-X, substituting 20 percent for 10 percent each place it appears therein. Although the
Sponsor does not believe the Initial Distribution constitutes the disposition of a “business” as such term is defined in Article 11-01(d), and instead constitutes an asset disposition, pro forma
financial statements would not be required even if it did constitute a “business disposition,” because it would not be considered “significant” under such tests. The Sponsor advises the Staff that (i) the amount of Bitcoin
to be contributed from the GBTC Trust to the BTC Trust in connection with the Initial Distribution is expected to be less than 20% of the Bitcoin held by the GBTC Trust, and (ii) neither the GBTC Trust nor the BTC Trust generates any revenues.
As such, with respect to the GBTC Trust, the disposition of Bitcoin and/or shares of the BTC Trust occurring in connection with the Initial Distribution is not “significant” for purposes of Article
11-01 of Regulation S-X, and no pro forma financial information is required to be presented.

2.
 Please provide us with your legal analysis as to whether the distribution of BTC Shares to the GBTC
Shareholders as described in the information statement constitutes a sale or distribution for value within the meaning of Section 2(a)(3) of the Securities Act.

Response

 The
Sponsor submits that the Initial Distribution does not constitute a sale or distribution for value within the meaning of Section 2(a)(3) of the Securities Act, because a GBTC Shareholder neither gives value for, nor makes an independent
investment decision about, the BTC Shares and, therefore, does not need the protection afforded by the Securities Act. In fact, consummation of the Initial Distribution does not require that GBTC Shareholders pay any consideration, exchange or
surrender existing GBTC Shares or take any other action to receive BTC Shares, and no vote or consent of GBTC Shareholders is required or is being requested.

Staff Legal Bulletin No. 4, dated December 16, 1997 (“SLB 4”), addresses the Staff’s views regarding whether
Section 5 of the Securities Act applies to spin-offs. In particular, SLB 4 provides that a subsidiary is not required to register a spin-off under the Securities Act if the following five conditions are
met: (1) the parent stockholders do not provide consideration for the spun-off shares; (2) the spin-off is pro rata to the parent stockholders; (3) the
parent provides adequate information about the spin-off and the subsidiary to its stockholders and to the trading markets; (4) the parent has a valid business purpose for the spin-off; and (5) if the parent spins off “restricted securities,” it has held those securities for at least two years.

The Sponsor believes that the Initial Distribution meets the conditions outlined in SLB 4 in all material respects, and that the GBTC Trust
therefore should be permitted to complete the Initial Distribution without requiring registration of the Initial Distribution under the Securities Act. While the Initial Distribution may not ultimately be characterized as a “spin-off” for purposes of presentation under U.S. generally accepted accounting principles (“U.S. GAAP”), and the Sponsor therefore acknowledges that the fact pattern presented may not be fully
aligned with customary fact patterns in corporate spin-offs, the Sponsor notes that SLB 4 defines a “spin-off” as occurring when “a parent company distributes shares of a subsidiary to the
parent company’s shareholders,” as is the case with the Initial Distribution (as noted in the Sponsor’s response to Comment 3 below). Further, the Sponsor submits to the Staff that the basic principles underlying the Staff’s
guidance in SLB 4 are addressed by the fact pattern presented by the Initial Distribution, and that for purposes of analyzing whether a sale or distribution for value has occurred within the meaning of Section 2(a)(3) of the Securities Act,

April 12, 2024

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there are no material differences between the Initial Distribution and a more customary corporate spin-off that comports with SLB 4. In particular, the
Sponsor advises the Staff that the purpose of the Initial Distribution is not to (i) create a market in the spun-off securities without providing adequate information to its shareholders or to the trading
markets; (ii) create a public market in the shares of a company that has minimal operations or assets; or (iii) create a public market in the shares of a company that is a development stage company that has no specific business plan or
whose business plan is to engage in a merger or acquisition with an unidentified company, and therefore not inconsistent with the policy rationale underlying SLB 4.

A detailed analysis of the five conditions in SLB 4 to the Initial Distribution is set forth below:

A. The parent shareholders do not provide consideration for the spun-off shares

The Commission has taken the position that a dividend of securities generally does not constitute a “sale” within the meaning of
Section 2(a)(3) of the Securities Act because such dividend does not constitute a disposition “for value” within the meaning of that section. See Securities Act Release No. 33-929 (July 29,
1936). The rationale for this position is that the recipient of a dividend of securities neither gives value for, nor makes an independent investment decision about, such securities and, therefore, does not need the protection afforded by the
Securities Act. As described in the Information Statement, the GBTC Shareholders will receive BTC Shares in connection with the Initial Distribution solely by virtue of their ownership of GBTC Shares on the Record Date, and will not be required to
pay any consideration, exchange or surrender existing GBTC Shares or take any other action to receive BTC Shares. Furthermore, the GBTC Shareholders will not be making any investment decision about the BTC Shares or about the Initial Distribution.
In addition, consummation of the Initial Distribution does not require any action whatsoever to be taken on the part of GBTC Shareholders, and GBTC Shareholders are expected to retain the same proportionate exposure in the Bitcoin underlying their
GBTC Shares (including their GBTC Shares and BTC Shares) as a result of the Initial Distribution. Therefore, the first condition of SLB 4 is met.

B. The spin-off is pro rata to the parent shareholders

As described in the Information Statement, the distribution of BTC Shares to GBTC Shareholders will be effected on a pro rata basis, such that
each GBTC Shareholder on the Record Date will be entitled to receive BTC Shares pro rata based on a 1:1 ratio, such that for each one share of the GBTC Trust held by each GBTC Shareholder, such GBTC Shareholder will be entitled to receive one BTC
Share on the Distribution Date. Therefore, the second condition of SLB 4 is met.

 C. The parent provides adequate information about the
spin-off and the subsidiary to its shareholders and to the trading markets

 SLB 4 states that,
if the subsidiary to be spun-off is a non-reporting company, the parent provides adequate information if, by the date it
spins-off the securities: (i) it gives its shareholders an information statement that describes the spin-off and the subsidiary and that substantially complies with
Regulation 14A or Regulation 14C under the Exchange Act; and (ii) the subsidiary registers the spun-off securities under the Exchange Act. With respect to a reporting subsidiary that has not been
reporting for 90 days (such as the BTC Trust, as of the Distribution Date), the parent may provide adequate information in the same manner as a non-reporting subsidiary.

On or prior to the Distribution Date, the GBTC Trust will have satisfied each of these requirements in respect of providing adequate
information. The GBTC Trust will give GBTC Shareholders the Information Statement, which describes the Initial Distribution and the BTC Trust, and substantially complies with the

April 12, 2024

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disclosure requirements set forth in Regulation 14C under the Exchange Act. In addition, in connection with the effectiveness of the BTC Trust Registration Statement and prior to the consummation
of the Initial Distribution, the BTC Trust intends to register the BTC Shares under the Exchange Act by filing a registration statement on Form 8-A (the “BTC Trust Form
8-A”). The BTC Trust Form 8-A is expected to become effective concurrently with the effectiveness of the BTC Trust Registration Statement, each of which will occur
on or prior to the Record Date prior to the distribution of any BTC Shares in the Initial Distribution. As such, as of the Distribution Date, the BTC Trust will have registered the BTC Shares under the Exchange Act and be subject to the reporting
requirements of the Exchange Act. Therefore, the GBTC Trust satisfies the third condition of SLB 4 as applicable for a spin-off of a non-reporting subsidiary.

D. The parent has a valid business purpose for the spin-off

The Sponsor believes the Initial Distribution will accomplish a number of important business objectives and is in the best interests of GBTC
Shareholders for a number of reasons. The Initial Distribution will result in GBTC Shareholders incurring lower fees, because the BTC Trust will have a materially lower fee than the GBTC Trust, thereby creating a lower blended fee for investors
across the GBTC Trust and the BTC Trust. In addition, the Initial Distribution will not alter GBTC Shareholders’ exposure to Bitcoin underlying the GBTC Shareholders’ aggregate shareholdings. Furthermore, for U.S. federal income tax
purposes the Initial Distribution is expected to be a non-recognition event for both the GBTC Trust and the GBTC Shareholders as of the Record Date, effectively enabling GBTC Shareholders to shift a portion of
their spot Bitcoin exchange-traded product (“ETP”) exposure into a lower fee investment vehicle without recognizing gain or loss for U.S. federal income tax purposes. Finally, following the Initial Distribution, the BTC Trust and the GBTC
Trust will operate as independent NYSE Arca, Inc. (“NYSE Arca”) listed ETPs, and neither will have any share ownership, beneficial or otherwise, in the other, providing all investors with another cost-effective spot Bitcoin ETP option.
These reasons, among others, are set forth on page 3 of the Information Statement under “Purpose of the Initial Distribution” and constitute a valid business purpose in satisfaction of the fourth condition of SLB 4.

The Sponsor further advises the Staff that the purpose of the Initial Distribution is not to (i) create a market in the spun-off securities without providing adequate information to its shareholders or to the trading markets; (ii) create a public market in the shares of a company that has minimal operations or assets; or
(iii) create a public market in the shares of a company that is a development stage company that has no specific business plan or whose business plan is to engage in a merger or acquisition with an unidentified company, and therefore not
inconsistent with the policy rationale underlying this condition of SLB 4.

 E. If the parent
spins-off “restricted securities,” it has held those securities for at least two years

The BTC Trust is a newly formed Delaware statutory trust which will not have any independent assets or operations prior to the Initial
Distribution. SLB 4 states that the two-year holding period condition does not apply where the parent formed the subsidiary being spun off, rather than acquiring the business from a third party. The Sponsor
formed the BTC Trust on March 12, 2024, among other reasons, to receive the contemplated contribution of Bitcoins from the GBTC Trust and effectuate the Initial Distribution as described in the Information Statement, and the BTC Trust will have
no material assets or operations prior to the occurrence of such events. Although a parent-subsidiary relationship between the GBTC Trust and the BTC