The Bitcoin ETF’s rise has led to a narrowing discount for Grayscale Bitcoin Trust (GBTC). As of October 13, GBTC’s discount to Bitcoin’s net asset value (NAV) stands at 15.87%, drawing attention from investors and analysts. Some believe this reflects the market’s anticipation of SEC approval for spot Bitcoin ETFs.
The discount to NAV is a key metric, signaling how far a mutual fund or ETF is trading below its actual net asset value. In this case, GBTC’s discount began to decrease significantly when financial giants like BlackRock filed applications for spot Bitcoin ETFs back in June. From a steep 44% on June 15, the discount had already fallen to 26.7% by July 5, and this trend has persisted ever since.
This narrowing discount is reminiscent of the situation in December 2021 when Bitcoin was soaring to its all-time high of $69,000. According to CoinGecko, GBTC’s discount was at a similar level then. It suggests that the market may be pricing in the possibility of spot Bitcoin ETF approval by year’s end.
SEC’s Grayscale Decision Fuels Bitcoin ETF Confidence
Oliver Velez, a prominent Bitcoin advocate, shares this sentiment and believes that the market is actively factoring in the SEC’s approval. On the other hand, cryptocurrency investor Lyle Pratt expects GBTC’s discount to continue dwindling in the coming weeks as spot Bitcoin ETFs draw closer to regulatory approval.
Recent reports have indicated that the SEC is unlikely to appeal the Grayscale decision made on October 13. This development has prompted Bloomberg ETF analyst James Seyffart to assert that spot Bitcoin ETF approvals now appear to be a “done deal.” Grayscale itself confirmed on October 15 that the SEC’s 45-day period to seek a rehearing had elapsed, signaling that the court would soon issue its “final mandate.”
Grayscale is ready to convert GBTC into an ETF upon SEC approval, and they eagerly await the green light to proceed. In light of these developments, the prospect of spot Bitcoin ETFs in the United States is drawing closer to becoming a reality, and the narrowing discount on GBTC could be a testament to the growing optimism among investors regarding this pivotal development in the cryptocurrency market.