Grayscale Investments’ GBTC Discount Nears All-Time Low

• Grayscale Investments’ discount falls to an all-time low of 12 percent to its net asset value (NAV).

• As of December last year, it had a record low of 50 percent, but the current development has been linked to the building anticipation of a possible spot Bitcoin ETF approval. 

Grayscale Investments remains part of the several institutions that have so far submitted applications for spot Bitcoin Exchange-Traded Fund (ETF) after the court recently urged the US Securities and Exchange Commission to review its previous decision.

Many analysts have predicted that the odds for a spot Bitcoin ETF approval is currently high with Bloomberg analysts estimating a 75 percent chance this year. According to them, it is almost certain that there will be a spot-based ETF product by the end of 2024. 

In response to this groundbreaking development, Grayscale has observed that its Bitcoin Fund (GBTC) has narrowed to a 12 percent discount to its net asset value (NAV). Comparatively, this is the lowest it has ever recorded since December 2021. It is important to note that GBTC had a record low of nearly 50 percent in December last year after trading at a discount since February 2021. Currently, both Grayscale and Bitcoin enthusiasts are waiting for a decision from the U.S.

Securities and Commission Exchange to convert its GBTC into an ETF. Grayscale is currently the largest crypto fund in the world with an Asset Under Management (AUM) of $16.7 billion. 

Grayscale Operationally Ready for Conversion

According to a Grayscale spokeswoman, the team remains operationally ready for this record conversion.

The Grayscale team remains operationally ready to convert GBTC to an ETF upon the SEC’s approval, and we look forward to sharing more information as soon as practicable.

For now, the court is expected to make a final ruling in seven days and is said to be a repetition of the previous ruling. SEC has also declared its intention not to appeal. Commenting on this, TD Cowen analyst Jaret Seiberg has predicted that the Commission could succumb to pressure to approve its first spot Bitcoin ETF.

There will be so much political and legal pressure on the SEC that SEC Chair Gary Gensler has to approve a spot Bitcoin ETF. Cementing its power over Bitcoin ETFs will strengthen the SEC’s push for broader crypto authority once Congress is ready to enact crypto market structure legislation.

Another institution that stands a better chance of getting a spot Bitcoin ETF approval is BlackRock. This company has so far gotten approval for 575 out of its 576 ETF applications. Its decision to apply at this moment encouraged the likes of Fidelity and others to reapply despite their previous rejections.

A couple of days ago, it was rumored that BlackRock had its ETF application approved. However, the company has come out to deny it. The news took Bitcoin to $30k from $27k, before pulling back to $28,419.68. In just an hour, about $100 million liquidation was recorded. According to CoinGlass data, $81 million worth of short positions were liquidated on the move to $30k. 

As of press time, Bitcoin was up by 4 percent in the last seven days with a neutral market sentiment. In the last 24 hours, the asset has declined by 0.41 percent with a safety score of 59/100. 

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