The Grayscale Bitcoin Trust (GBTC), a popular investment vehicle for Bitcoin (BTC), is expected to eliminate its BTC price “discount” by 2024, according to CoinGlass, a monitoring resource for cryptocurrency. Despite its success, GBTC has been consistently trading at a discount to the Bitcoin spot price since February 2021.
However, recent developments have given hope that the situation may change. On August 29, Grayscale scored a court victory against the United States regulators, instantly boosting GBTC’s performance. This news caused the so-called “GBTC premium” to reach its lowest levels since December 2021, currently standing at just -17%, less than half of its peak of nearly 50%.
The discount is projected to close entirely next year, as the U.S. Securities and Exchange Commission (SEC) must now consider GBTC’s conversion to a Bitcoin spot price exchange-traded fund (ETF) on the same terms as other applicants. CoinGlass, in its analysis, confidently predicted the premium’s return.
GBTC’s astronomical success can be attributed to its substantial assets under management (AUM). With over 600,000 BTC stored in the fund, it played a significant role in propelling Bitcoin to its current all-time highs, as mentioned by Dylan LeClair, a senior analyst at digital asset fund UTXO Management. LeClair estimated that the recent discount reduction from -26% to -17% translates to approximately 56,000 BTC returning to GBTC’s AUM if shares are marked to market.
The implications of Grayscale’s news have not gone unnoticed in the market. Analysts have noted the potential return of key moving averages (MAs) for Bitcoin’s price action. Specifically, the 200-week and 200-day trend lines, which failed to act as support during Bitcoin’s decline to multi-month lows in August, are now being closely watched. Despite the previous daily candle closing above these levels, BTC/USD is struggling to maintain its position.
Rekt Capital, a popular trader and analyst, emphasized the importance of reclaiming these MAs for bullish confirmation. Referring to the potential bullish invalidation of Bitcoin’s double top structure on weekly timeframes, he stated that BTC needs to reclaim the Bull Market moving averages as support to be in the clear.
While these developments are promising, it is essential to note that investing and trading in cryptocurrencies involve risks, and readers should conduct their own research before making any decisions. This article does not provide investment advice or recommendations.
In conclusion, the GBTC premium, which had been negative for over two-and-a-half years, is anticipated to close the discount and return to positive territory in 2024. Grayscale’s court victory and the possibility of converting GBTC into a Bitcoin spot price ETF have boosted hopes for this outcome. Meanwhile, the market is closely monitoring Bitcoin’s price action and the potential reclaiming of key moving averages for further bullish confirmation.
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