Traders are profiting from the shrinking discount between Grayscale’s Bitcoin Trust (GBTC) and its Bitcoin holdings.
– GBTC shares traded at $19.71, 137% higher than its price on December 13, 2020.
– GBTC’s gains have outperformed Bitcoin’s price increase since December 13.
– GBTC is a closed-end fund that allows investors to gain Bitcoin exposure.
– The discount between GBTC’s price and its net asset value (NAV) has been shrinking.
– The Securities and Exchange Commission’s approval of a spot Bitcoin ETF could eliminate the discount.
Traders who bought shares of Grayscale’s Bitcoin Trust (GBTC) during its lowest point have been reaping profitable gains. GBTC shares opened at $19.71, significantly higher than its price on December 13, 2020. This was when the trust traded at a nearly 50% discount relative to its Bitcoin holdings, the largest price discrepancy it has ever experienced. GBTC’s gains have outperformed the increase in Bitcoin’s price during the same period. GBTC is a closed-end fund that allows investors to gain exposure to Bitcoin. However, due to its structure, shares have traded at a discount since February 2021. The discount has been shrinking recently, and the approval of a spot Bitcoin ETF could potentially eliminate it. The odds of such an approval this year are currently estimated to be 75%.
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