GBTC discount narrows during SEC hearing, yield curve inversion deepens; 60% probability for 50bps hike

Quick Take

Result of Powell Speaking

  • The US 10-year minus 02 years has reached -100 bps inversion.
  • The forward growth outlook is a full percentage point lower than the expected policy rate.
  • Levels of policy error not achieved since February 1980.
  • Inversion points to a recession, but a larger inversion doesn’t not mean a faster or deeper recession.
  • While the terminal rate is now forecasted at 5.6% for October 2023 and a 60% probability of a 50bps rate hike during the March FOMC meeting.
US10Y-US02Y: (Source: Bloomberg)
US10Y-US02Y: (Source: Bloomberg)
Meeting Probabilities: (Source: CME Fed Watch Tool)
Meeting Probabilities: (Source: CME Fed Watch Tool)

 

Result of Grayscale vs. SEC hearing

  • So far, GBTC is up roughly 9% today due to the current hearing, Grayscale vs. SEC.
  • The discount to NAV is roughly 40%, which assumes Grayscale’s chances of a spot ETF have increased.
  • The gap was as narrow as -35%.
  • GBTC would have a pathway to convert to NAV.
  • BTC remains roughly flat for the day at $22,300
GBTC: (Source: TradingView)
GBTC: (Source: TradingView)

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Source: https://cryptoslate.com/insights/gbtc-discount-narrows-during-sec-hearing-yield-curve-inversion-deepens-60-probability-for-50bps-hike/