The Grayscale Bitcoin Trust (GBTC) Discount Narrows as Crypto Traders Anticipate Bitcoin ETF Approval
The Grayscale Bitcoin Trust (GBTC) has reached its lowest level in 22 months as traders in the crypto market become more optimistic about the approval of the first spot Bitcoin exchange-traded fund (ETF) in the United States. Recent data from YCharts shows that GBTC’s discount to Bitcoin’s net asset value has gradually narrowed to 16%. This is a significant improvement compared to December last year when the discount was at 50% during the bear market. The narrowing of the discount began in mid-June after BlackRock filed for a spot Bitcoin ETF application, and it has continued since then.
Impact of Potential Approval on GBTC
Crypto Twitter is buzzing with speculation about the impact of a potential approval on GBTC. Some analysts believe that the discount will “evaporate over the next week or two.” This optimism stems from the fact that the US Securities and Exchange Commission (SEC) will not appeal the court’s ruling on Grayscale’s spot Bitcoin ETF application. The SEC’s failure to appeal has sparked rumors of a possible approval, with Bloomberg’s ETF analyst referring to it as a “done deal.”
Grayscale Ready to Issue ETF
Grayscale, the digital asset manager, is prepared to issue its ETF once it receives approval from the SEC. The company stated that it remains operationally ready to convert GBTC into an ETF upon approval. Currently, it is waiting for the court to deliver its final mandate within seven days after the lapse of the SEC’s 45-day period to seek an appeal.
Potential Inflows into Crypto Market
If a spot Bitcoin ETF is approved, it could bring significant net inflows into the crypto market. However, Coinbase Institutional’s monthly outlook report suggests that these inflows will materialize gradually over time. The report also mentions that the potential approval of a spot Bitcoin ETF is already partially priced in.
Hot Take: Crypto Traders Anticipate GBTC Discount to Disappear with Bitcoin ETF Approval
The narrowing discount of the Grayscale Bitcoin Trust (GBTC) compared to Bitcoin’s net asset value indicates growing optimism among crypto traders about the approval of a spot Bitcoin ETF in the US. With the US Securities and Exchange Commission (SEC) choosing not to appeal the court’s ruling on Grayscale’s application, speculations are rife that a spot Bitcoin ETF approval is imminent. This has led to expectations that GBTC’s discount will disappear in the coming weeks. Grayscale is ready to issue its ETF once it receives SEC approval. If approved, a spot Bitcoin ETF could attract significant net inflows into the crypto market, although Coinbase Institutional suggests that these inflows will materialize gradually over time.
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