Grayscale Bitcoin Trust Hits Lowest Discount Amid Possible US Spot Bitcoin ETF Approval
Summary:
Grayscale Bitcoin Trust (GBTC) is trading at its lowest discount in nearly two years amid discussions about the potential approval of spot Bitcoin ETFs in the US. The GBTC's discount has lessened to 15.87% as of October 13. This occurs as speculation grows about the likelihood of a spot Bitcoin ETF approval by the year's end, and analysts predict that GBTC’s discount will continue to decrease. Grayscale reportedly being ready to transition GBTC into an ETF following SEC approval is adding to this conversation.
Grayscale Bitcoin Trust (GBTC), a bitcoin investment scheme by Grayscale, is experiencing its lowest trade discount in almost two years amidst ongoing discussions about approving spot Bitcoin exchange-traded funds (ETFs) in the US. Current figures from YCharts highlight a reduction in GBTC’s discount to Bitcoin's net asset value (NAV) to 15.87% as of October 13. A mutual fund or ETF's discount to NAV is a useful percentage that calculates the extent to which the fund or ETF trades below its NAV, indicating the deviation of a security's market price from its actual value. It became apparent that GBTC's discount was decreasing when large financial institutions like BlackRock submitted Bitcoin ETF applications in mid-June, causing the discount to drop from 44% on June 15 to 26.7% by July 5. This decline has been steady since then. The previosuly recorded similar level for GBTC's discount was in early December 2021, merely a month after Bitcoin reached its highest price ever, $69,000 on November 10, according to CoinGecko. Oliver Velez, a Bitcoin enthusiast, reckons that the market is factoring in a possible approval of spot Bitcoin ETF by the end of the year. Concurrently, Lyle Pratt, a cryptocurrency investor, predicts that GBTC’s discount to keep decreasing over the coming weeks as approval for spot Bitcoin ETFs becomes more likely.
It was reported on October 13 that the Securities and Exchange Commission (SEC) would not contest the Grayscale decision, prompting James Seyffart, a Bloomberg ETF analyst, to suggest that approval for spot Bitcoin ETFs is virtually guaranteed in an October 13 update. Following this on October 15, Grayscale supposedly announced that the SEC had exceeded its 45-day timeframe to request a rehearing, resulting in the court finalizing its "final mandate" within the next seven days. The company stated it was prepared to transition GBTC to an ETF as soon as it received SEC approval and promised to disclose further details as soon as possible. They did not immediately respond when approached by Cointelegraph for a comment.
Published At
10/16/2023 3:17:04 AM
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