Grayscale Bitcoin Trust (GBTC) Discount Keeps Plunging

Alex Dovbnya

Grayscale Bitcoin Trust’s (GBTC) discount has seen a dramatic shift from a daunting 43% in mid-June to a more optimistic 16.5%

Grayscale Bitcoin Trust’s (GBTC) discount, which was at a staggering 43% when BlackRock filed for a spot Bitcoin ETF in mid-June, has significantly narrowed down to 16.5%. 

The fluctuation in this discount rate is widely viewed as an indicator of the shifting market confidence in the potential approval of a spot Bitcoin ETF.

A persistent discount 

GBTC’s initial sizable discount to its underlying Bitcoin holdings was due to a combination of factors. Historically, GBTC traded at a premium, but as competition grew and the prospect of Bitcoin ETFs became more real, the trust began trading at a discount. The lack of an ETF option led many to opt for GBTC as a proxy to gain exposure to Bitcoin, but the anticipation of an ETF has redirected some interest away from the trust, leading to a discount.

Recently, Grayscale scored a win in its court battle against the U.S. Securities and Exchange Commission (SEC), which might make it possible to convert its flagship fund into a spot Bitcoin ETF. 

Inching closer to a Bitcoin ETF 

The SEC appears to be inching closer to approving a spot Bitcoin ETF, a decision that would be transformative for the cryptocurrency industry. Jake Chervinsky, chief policy officer at Blockchain Association, noted that “all signs point toward SEC approval for Bitcoin spot ETFs.” 

Recent updates to ARK Investment Management’s spot Bitcoin ETF prospectus have contributed to this optimism. After feedback from the SEC regarding their S-1 filings, ARK clarified key points, particularly those pertaining to Net Asset Value (NAV) calculations.

About the author

Alex Dovbnya