The Grayscale Bitcoin Trust (GBTC) discount, which was a staggering 43% when BlackRock filed for a spot Bitcoin ETF in mid-June, has increased significantly narrowed up to 16.5%.
The fluctuation of this discount rate is widely considered an indicator of changing market confidence in the potential approval of a Bitcoin spot ETF.
A persistent discount
GBTC’s initial considerable 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 turn to GBTC as a substitute to gain exposure to Bitcoin, but the anticipation of an ETF has diverted some interest away from the trust, leading to a discount.
Recently, Grayscale scored a victory in its court battle against the US Securities and Exchange Commission (SEC), which could make it possible to convert its flagship fund into a spot Bitcoin ETF.
Getting closer to a Bitcoin ETF
The SEC appears to be getting closer to approving a spot Bitcoin ETF, a decision that would be transformative for the cryptocurrency industry. Jake Chervinsky, chief policy officer at the Blockchain Association, noted that “all signs point toward SEC approval for Bitcoin spot ETFs.”
Recent updates to the ARK Investment Management Bitcoin ETF spot prospectus have contributed to this optimism. Following comments from the SEC regarding its S-1 filings, ARK clarified key points, particularly those related to net asset value (NAV) calculations.
