In a year that kicked off with doubts surrounding cryptocurrencies, those who backed Grayscale Investment’s Bitcoin trust (GBTC) have reaped substantial rewards. GBTC shares have surged by a remarkable 220% in 2023, reaching an impressive $26.79.
This performance has surpassed even Nvidia Corp (NVDA), which is the best-performing S&P 500 stock and has seen a 198% increase.
GBTC’s Growth
The surge in GBTC shares is closely tied to the growing optimism surrounding the transformation of the Grayscale Bitcoin Trust into an open-ended exchange-traded fund (ETF) solely dedicated to Bitcoin. As this optimism continues to gain ground, the gap between GBTC’s share price and the trust’s net-asset value (NAV) has significantly narrowed, shrinking from a hefty 46% to a mere 13% this year.
Investors have been adopting a dual strategy, purchasing GBTC shares while concurrently offloading Bitcoin in the spot/futures market. This tactic serves as a safeguard against potential losses. If the conversion garners the coveted approval, market makers are poised to align the price with NAV.
The Market is Bullish
Market experts and analysts are exuberant, recognizing the merits of GBTC as a long-term investment. As the discount continues to shrink and the likelihood of the SEC greenlighting the ETF conversion surges, the value of GBTC may continue its upward trajectory.
The growing probability of the SEC granting ETF approval may prompt traders to reevaluate their tactics. This, in turn, could alleviate the selling pressure on Bitcoin, lending support to the cryptocurrency.
Also Read: BTC Price Hit $30K, Peter Schiff Questions GBTC’s Impact on Bitcoin’s Rally
Hopeful for a Bright Future
The anticipation of several spot-based ETF approvals early next year has also been boosting Bitcoin’s value. Many expect Bitcoin to reach $50,000 and beyond once these ETFs get approved. However, the increasing financialization of the market may introduce new selling pressures.
Investors and market watchers are keeping a close watch on the SEC and any regulatory developments that could impact cryptocurrency investments.
Read More: SEC’s Decision on Bitcoin ETF Approval: John Deaton Shares Two Possible Scenarios
It just goes to show – those who do their research and take calculated decisions are likely to profit greatly! Such is the power of the market.
Source: https://coinpedia.org/news/grayscale-bitcoin-trust-shines-bright-a-220-gain-in-2023-outpacing-nvidia/