Grayscale Bitcoin Trust (GBTC) Trading at Lowest Discount in Almost Two Years
Grayscale’s Bitcoin investment vehicle, Grayscale Bitcoin Trust (GBTC), is currently trading at its lowest discount in nearly two years. This comes as spot Bitcoin ETFs are inching closer to potential approval in the United States. According to data from YCharts, GBTC’s discount to Bitcoin net asset value (NAV) has narrowed to 15.87% as of October 13.
Narrowing Discount Indicates Market Confidence in Spot Bitcoin ETF Approval
The discount to net asset value (NAV) is a percentage that measures how much a mutual fund or ETF is trading below its net asset value. It is used to track the difference between a security’s trading price and its true value. GBTC’s discount began to narrow when BlackRock and other financial institutions filed spot Bitcoin ETF applications in mid-June. Since then, the discount has continued to decrease.
Similar Discount Level Last Seen in December 2021
The last time GBTC’s discount reached a similar level was in early December 2021, just a month after BTC reached its all-time high price of $69,000. This narrowing of the discount suggests that the market is pricing in the potential approval of spot Bitcoin ETFs by the end of the year, according to Bitcoin advocate Oliver Velez and cryptocurrency investor Lyle Pratt.
SEC Decision on Grayscale’s Conversion to ETF
Reports indicate that the SEC will not appeal the Grayscale decision, leading to speculations about spot Bitcoin ETF approvals being a “done deal.” On October 15, Grayscale released a statement stating that the SEC’s 45-day period to seek a rehearing had passed. The company remains prepared to convert GBTC to an ETF upon SEC approval and will share more information in due course.
Hot Take: Market Confidence in Spot Bitcoin ETF Approval Grows
With Grayscale Bitcoin Trust (GBTC) trading at its lowest discount in nearly two years, it is evident that market confidence in the approval of spot Bitcoin ETFs is growing. The narrowing discount indicates that investors are anticipating the potential approval of these ETFs by the end of the year. This development aligns with recent reports that the SEC will not appeal the Grayscale decision, further fueling speculation about spot Bitcoin ETF approvals becoming a reality. As the market continues to bet on this outcome, the discount on GBTC is expected to continue shrinking, potentially reaching even lower levels in the coming weeks.
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