- Grayscale’s GBTC shares are trading at a discount of 20.6%, narrowing consistently since mid-June.
- GBTC discount started to narrow right after BlackRock filed its spot Bitcoin ETF application and remains tied to the SEC’s approval of the investment product.
- Bitcoin spot ETFs are closer to approval with Grayscale’s lawsuit win against the SEC, however, delays are likely to dampen demand for GBTC shares.
Grayscale, a cryptocurrency asset management firm, made headlines for its landmark win against the US Securities & Exchange Commission (SEC). Grayscale’s lawsuit win has had an impact on the price of its GBTC shares.
The discount on GBTC has narrowed. As of early Friday, GBTC is trading at a 20.62% discount. The discount is deeply correlated with the supply and demand for GBTC shares. It is, therefore, likely that an approval of a spot Bitcoin ETF by the SEC drives demand for the shares higher and pushes GBTC from discount to premium territory.
Also read: Ethereum Cancun upgrade development is on track, testing phase comes next
Grayscale GBTC shares trade at 20.62% discount after landmark lawsuit win
Grayscale’s win against the US SEC marked a key milestone for the asset manager in its journey toward launching the spot Bitcoin ETF for investors. While there is time for the regulator to review and appeal the ruling, the lawsuit had its impact felt in the crypto ecosystem.
GBTC shares that have been trading at a discount for nearly two years witnessed an increase in demand among institutional investors. This narrowed the GBTC discount. When the world’s largest asset manager, BlackRock, filed its spot Bitcoin ETF application, the GBTC discount started to narrow consistently.
The GBTC discount has narrowed from 43.3% on June 15 to 20.6% on September 1, based on data from Coinglass.
Grayscale Investments BTC Premium
Can GBTC discount be flipped into premium territory?
The GBTC discount is correlated with the demand for Grayscale’s shares. An approval of a spot Bitcoin ETF by the financial regulator is likely to drive demand for GBTC shares and result in a further narrowing of the GBTC discount. Though the discount is still stark, a continuation of this trend could flip the discount into a premium for the first time since February 2021.
As of September 1, the SEC has delayed its decision on the spot Bitcoin ETF applications of BlackRock, Wisdom Tree Funds, Invesco, Galaxy Digital and Valkyrie Funds.
Crypto ETF FAQs
What is an ETF?
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Is Bitcoin futures ETF approved?
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Is Bitcoin spot ETF approved?
Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Chainlink holds near three-year high fueled by EU tokenized securities partnership
Chainlink (LINK) price trades slightly down around $25.50 on Tuesday following a 33% rally that was spurred by its partnership with Frankfurt-based fintech 21X for Europe’s first tokenized securities trading and settlement system.
Trending altcoins: Hedera, VeChain and Algorand extend rally by posting double-digit gains
Three trending altcoins – Hedera (HBAR), VeChain (VET), and Algorand (ALGO) – post double-digit gains on Tuesday after surging last week, benefiting from the recent consolidation of Bitcoin prices.
Ondo Finance Price Forecast: ONDO reaches a new all-time high of $1.79
Ondo Finance surges more than 11% on Tuesday and reaches a new all-time high of $1.79. ONDO’s daily trading volume reached a new yearly high of $994 million, suggesting a surge in traders’ interest and liquidity.
XRP en route to new all-time high; key metrics to watch out for
Ripple whales have accumulated over $1.8 billion worth of XRP tokens amid a 200% rise in weekly active addresses. WisdomTree filed an S-1 registration with the SEC for an XRP ETF. XRP investors across several cohorts realized over $2.7 billion in profits in past three days following heavy Ripple token unlock.
Bitcoin: A healthy correction
Bitcoin (BTC) experienced a 7% correction earlier in the week, dropping to $90,791 on Tuesday before recovering to $97,000 by Friday. On-chain data suggests a modest rebound in institutional demand, with holders buying the dip. A recent report indicates BTC remains undervalued, projecting a potential rally toward $146K.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.