Grayscale Bitcoin Trust (GBTC) witnessed its lowest point in 22 months last Friday, marking a 15.87% discount compared to its net asset value (NAV) – a level not seen since December 2021. The diminishing discount has sparked optimism in the cryptocurrency market, especially as the Securities and Exchange Commission (SEC) missed the deadline to appeal against Grayscale’s attempt to convert GBTC into a spot Bitcoin ETF, media reports said.
The discount on GBTC began to narrow around mid-June when financial institutions, including BlackRock, submitted applications for spot Bitcoin ETFs. Starting at 44% on June 15, the discount quickly decreased to 26.7% in three weeks and has continued to shrink since then. The “Discount to NAV” metric, indicating the extent to which a fund trades below its net asset value, has been consistently narrowing, reaching almost 50% during the bear market in December of the previous year.
As the deadline for SEC’s appeal passed on October 13, the court may reaffirm its directive for the SEC to reassess Grayscale’s request for a spot Bitcoin ETF. While the failure to appeal doesn’t guarantee approval, industry observers remain optimistic. Bloomberg ETF analysts have increased the odds of approval to 90% following updates to spot Bitcoin ETF prospectuses by Ark Invest and 21Shares, as requested by the SEC.
The narrowing GBTC discount and positive industry sentiments suggest growing confidence in the imminent approval of spot Bitcoin ETFs in the United States, marking a significant development in the cryptocurrency investment landscape.
