Grayscale’s GBTC Discount Hits 2-Year Low: ETF Approval Incoming?

Recent data from YCharts reveals that the Grayscale Bitcoin Trust (GBTC) is currently sporting a 12.26% discount—the lowest since November 2021. What’s the scoop for investors, and could this pave the way for the first-ever spot Bitcoin ETF in the United States?

Read on to find out.

What’s the Discount Craze About?

The GBTC discount is a key player in this unfolding story, representing the percentage by which GBTC trades above or below its net asset value (NAV), tied to the Bitcoin (BTC) price. But is the allure of an extra 10% discount worth giving up direct BTC holdings and waiting for Blackrock’s approval?

The SEC has entered into negotiations with Grayscale Investments over the details of the company’s application to convert its trust product GBTC into a spot Bitcoin ETF. All parties are currently actively advancing the application process. The SEC declined to comment on this new…
— Wu Blockchain (@WuBlockchain) November 9, 2023

Behind the scenes, the industry is buzzing with news that the U.S. Securities and Exchange Commission (SEC) is talking with Grayscale about converting GBTC into an ETF. After a recent court victory, Grayscale is in active discussions with key SEC divisions. Craig Salm, Grayscale’s Chief Legal Officer, assures their commitment to positive engagement, acknowledging that there are still details to iron out.

Notably, contenders like BlackRock and Fidelity are also making progress in their negotiations with the SEC. Salm is confident, asserting that it’s not a matter of “if” but “when.”

Also Read: SEC Starts Negotiations with Grayscale on GBTC Conversion to Bitcoin ETF

What Does the Future Hold for Grayscale?

The recent SEC lawsuit judgment has made Grayscale’s filing to convert GBTC into a spot Bitcoin ETF legally binding. Analysts predict a 90% chance of approval by January 2024. With 12 companies vying for spot Bitcoin ETF approval, industry experts anticipate simultaneous approvals to avoid a first-mover advantage.

The spotlight is on the Ark 21Shares spot Bitcoin ETF, with the SEC set to decide by January 10. The Grayscale case could set the stage for GBTC conversion and additional ETF filings, as confirmed by the U.S. Court of Appeals for the District of Columbia Circuit on August 29, 2023.

GBTC’s discount to NAV (the underlying Bitcoin) is now the lowest that it’s been since November 2021 — currently at 12%.
Looks like the market is pricing in very high probability of BTC ETF approval at this point.
— Will (@WClementeIII) November 8, 2023

Bitcoin Price Predictions

As anticipation grows, BTC is predicted to reach $69K fueled by the excitement surrounding GBTC conversion. Yet, in a twist, $ETHE is experiencing a discount of 19%, hitting a 19-month low—down from a staggering 59% in December.

The question arises: Will the SEC face a dilemma choosing between ETH and Bitcoin?

Also Read: Spot ETF Approval Could Soar BTC Price to $220k, Predicts John Deaton

GBTC Discount: Is It Worth the Wait?

The current GBTC discount at -12.26% has its own tale to tell, standing as the lowest since November 2021. Contrast this with a significant -48% discount in December 2022 following the FTX collapse. The decreasing discount percentage reflects growing optimism among market participants, buoyed by the rising expectation of a Bitcoin ETF approval and the fact that Bitcoin’s price is approximately 120% higher compared to a year ago.

Source: https://coinpedia.org/news/grayscales-gbtc-discount-nears-2-year-low-will-sec-eliminate-first-mover-advantage-and-approve-all-etfs/