On 16 June, Grayscale Investments’ Bitcoin Trust (GBTC) traded at a discount to NAV of over 34%. In Arcane Research, the dynamics were explained by troubles at Three Arrows Capital (3AC).
Analysts cited Bloomberg data, according to which 3AC was the largest holder of GBTC (38.9 million shares). Against a backdrop of liquidity issues, the firm also considered the option of selling assets.
The hedge fund had been increasing its positions in the bitcoin trust, aiming to profit from removing the discount ahead of the expected 6 July verdict by the SEC on Grayscale’s proposal to convert GBTC into an ETF. To this end, the firm was buying trust shares and opening short positions on the first cryptocurrency.
29 June, ahead of a decision on Grayscale’s application, the Commission will respond to Bitwise’s filing for launching a spot Bitcoin ETF. The firm experiences cautious optimism on this score.
Analysts stressed that the resulting discount to NAV in GBTC looks unwarranted. Taking into account the 2% annual management fee, the market does not envisage converting the closed-end trust into an exchange-traded fund over the next 17 years. Experts regard this scenario as unlikely.
Arcane Research viewed the potential SEC approval of a spot Bitcoin ETF as a bearish factor. They attributed this to potential shorting of the first cryptocurrency by arbitrageurs.
As reported, Grayscale Investments CEO Michael Sonnenshein назвал the launch, with regulator’s consent, of the inverse Bitcoin ETF a positive step, allowing short positions on digital gold.
Earlier, a senior manager allowed the possibility of filing a suit against the SEC in the event of GBTC’s registration as a spot Bitcoin ETF being denied.
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