Grayscale Bitcoin Trust (GBTC), the Bitcoin investment vehicle offered by Grayscale, is currently trading at its narrowest discount in almost two years. This comes as the possibility of spot Bitcoin exchange-traded funds (ETFs) being approved in the United States becomes more likely.
According to data from YCharts, GBTC’s discount to Bitcoin net asset value (NAV) has narrowed to 15.87% as of October 13. The discount to NAV is a percentage that indicates how much a mutual fund or ETF is trading below its net asset value. It serves as a metric to determine the extent to which a security is trading away from its true value.
The narrowing of GBTC’s discount began when BlackRock and several other financial institutions submitted spot Bitcoin ETF applications in mid-June. The discount decreased from 44% on June 15 to 26.7% by July 5, and has continued to narrow since then. The last time GBTC’s discount was at a similar level was in December 2021, shortly after Bitcoin reached its all-time high price of $69,000.
Bitcoin advocate Oliver Velez believes that the market is pricing in the approval of spot Bitcoin ETFs by the end of the year. Other analysts, such as cryptocurrency investor Lyle Pratt, anticipate that GBTC’s discount will continue to shrink over the next week or two as spot Bitcoin ETFs approach approval.
On October 13, reports surfaced that the Securities and Exchange Commission (SEC) would not appeal the Grayscale decision. This led Bloomberg ETF analyst James Seyffart to refer to spot Bitcoin ETF approvals as a “done deal.” Two days later, on October 15, Grayscale announced that the SEC’s 45-day period to seek a rehearing had passed, indicating that the court would issue its final mandate within seven calendar days. Grayscale stated that the company is prepared to convert GBTC into an ETF once the SEC approves it.
Cointelegraph reached out to Grayscale for comment, but did not receive an immediate response.
The narrowing discount of GBTC indicates growing confidence among investors in the potential approval of spot Bitcoin ETFs in the United States. Should these ETFs be approved, it would provide investors with a more accessible and regulated way to invest in Bitcoin, potentially leading to increased adoption and acceptance of the cryptocurrency. As the market eagerly awaits the SEC’s decision, the dynamics surrounding GBTC and Bitcoin continue to evolve.
In an ever-changing cryptocurrency landscape, it is crucial for investors to stay informed and navigate the market with caution. Protecting one’s crypto assets in a volatile market is of utmost importance. It is advisable for investors to seek guidance from experts and follow best practices to ensure the security of their holdings.
Please note that the information provided in this article is based on available data and expert opinions at the time of writing. The cryptocurrency market is highly volatile and subject to rapid changes. It is recommended to conduct thorough research and consult with professionals before making any investment decisions.