Grayscale Bitcoin Trust Discount Shrinks to 10.35% as ETF Hype Persists
The hype surrounding ETFs has helped narrow the discount on the Grayscale Bitcoin Trust (GBTC) to its lowest levels since July 2021.
According to data from YCharts, the discount on GBTC compared to its net asset value currently stands at 10.35% , marking a significant reduction from the record discount of nearly 50% during the crypto winter induced by FTX in December of the previous year.
The shrinking discount comes amid reports that the US Securities and Exchange Commission (SEC) has engaged in discussions with Grayscale Investments regarding the conversion of the trust into a spot Bitcoin ETF.
If successful, this move would generate significant market momentum and liquidity.
GBTC is a publicly traded investment vehicle operated by Grayscale Investments, a subsidiary of Digital Currency Group.
GBTC was created to provide investors with exposure to Bitcoin without actually needing to buy and hold the cryptocurrency themselves.
One notable characteristic of GBTC is that its shares often trade at a premium or discount to the net asset value (NAV) of the Bitcoin it holds.
The premium or discount is influenced by supply and demand dynamics in the market.
When demand for GBTC shares is high, the price can trade at a premium to the NAV, and when demand is low, it can trade at a discount.
Investor enthusiasm surrounding the potential approval of a spot Bitcoin ETF in the US has contributed to an all-time high in Bitcoin fund holdings, with total inflows surpassing $1 billion this year.
Last week, market sentiment received an additional boost when BlackRock, a giant in fund management, announced its plans to launch an Ether-based ETF.
The news propelled Ether to a seven-month high, outperforming Bitcoin.
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