Grayscale Bitcoin Trust’s Discount as ETF Optimism Mounts

Optimism surrounding the potential approval of the Bitcoin ETF pushed Greyscale Bitcoin Trust's discount to 10.35% below its net assets, the lowest level since July 2021, according to Ycharts data.

The Greyscale Bitcoin Trust (GBTC) allows investors to trade shares in trusts that hold large pools of Bitcoin, with each share tracking the price of Bitcoin—albeit speculatively. Since February 2021, GBTC has traded at a discount relative to its real value The price of BitcoinIn December 2022, it was reduced to 48 percent

Grayscale has long harbored ambitions to turn the trust into a spot exchange-traded fund (ETF), which would allow it to trade “like a national securities exchange like NYSE Arca or Nasdaq.” Officer Craig Salm.

To date, the US Securities and Exchange Commission (SEC) has rejected each and every spot Bitcoin ETF application, including Greyscale—but in October 2023, an appeals court ordered it to review Greyscale's application after the firm sued the SEC. Not allowing the fund to convert to an ETF.

While the SEC could still reject Greyscale's application, it would have to find new reasons to do so, as its previous assertion—that the Bitcoin futures market is not closely linked to the spot market—was deemed insufficient.

The court's order comes amid a wave of optimism over the adoption of bitcoin ETFs following the entry of BlackRock, the world's largest asset manager, into the fray in June 2023. Blackrock has continued to lay foundations in recent weeks. Its own Bitcoin ETF, with a ticker listed by the Depository Trust & Clearing Corporation (DTCC) at the end of October.

The approval of a space-hopeful Bitcoin ETF boosted the crypto market, with bitcoin hitting an 18-month high above $37,000 last week. At the time of going to press, Bitcoin was stable around $37,000, flat on the day and up 5.4% over the past seven days.