Certain analysts suggest that the narrowing of Grayscale GBTC’s discount can be attributed to investors factoring in the possibility of the SEC granting approval to several pending spot Bitcoin ETF applications.
Grayscale’s Bitcoin investment vehicle, known as Grayscale Bitcoin Trust (GBTC), is presently trading at its most meager discount in nearly two years. This narrowing of the discount coincides with the gradual progress of spot Bitcoin exchange-traded funds (ETFs) towards potential approval within the United States.
According to the latest data from YCharts, as of October 13, GBTC’s discount in relation to Bitcoin’s net asset value (NAV) has dwindled to 15.87%.
Discount to NAV is a percentage-based metric that quantifies how much a mutual fund or ETF is trading below its net asset value. It serves as an indicator to gauge the deviation between a security’s trading price and its true intrinsic value.
Data reveals that the discount associated with GBTC commenced its reduction when prominent financial institutions, including BlackRock, submitted spot Bitcoin ETF applications in mid-June. During this period, the discount contracted from 44% on June 15 to 26.7% by July 5. This reduction has persisted since then.
The most recent instance of GBTC’s discount reaching similar levels was in early December 2021, shortly after BTC achieved its record-high price of $69,000 on November 10, as reported by CoinGecko.
Oliver Velez, a prominent advocate for Bitcoin, opines that the market is adjusting prices in anticipation of the SEC’s approval of spot Bitcoin ETFs before the year’s end.
On the other hand, some analysts, such as cryptocurrency investor Lyle Pratt, hold the view that GBTC’s discount will continue to diminish rapidly over the upcoming week or two, especially as the approval of spot Bitcoin ETFs appears to be imminent.
Reports emerged recently, indicating that the United States Securities and Exchange Commission chose not to contest the Grayscale decision on October 13. This led Bloomberg ETF analyst James Seyffart to characterize the approval of spot Bitcoin ETFs as a “done deal” in a post on the same day.
Subsequently, on October 15, Grayscale issued a statement noting that the SEC’s 45-day window for seeking a rehearing had elapsed, implying that the court would soon issue its “final mandate” within seven calendar days.
“The Grayscale team stands prepared to transition GBTC into an ETF once the SEC grants its approval, and we eagerly anticipate sharing more details as soon as it becomes feasible,” as declared by the company.
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