GBTC discount narrows to 16% as Bitcoin ETF launch expectations mount

The discount on Grayscale Investments’ Bitcoin Trust (GBTC) to NAV narrowed to 15.87%, the lowest since December 2021. The catalyst was rising expectations for the imminent launch ETF based on digital gold.

THE GBTC DISCOUNT HAS NARROWED TO 16% AS THE MARKET BETS ON A BITCOIN SPOT ETF APPROVAL.

Grayscale’s Bitcoin Trust, commonly known as GBTC, has experienced notable changes in its market dynamics. At the start of this year, GBTC was trading at a significant discount of 48.31%… pic.twitter.com/2nWLmvnewb

— The Wolf Of All Streets (@scottmelker) October 13, 2023

Earlier in the year, the discount stood at 48.31%, drawing the attention of crypto traders and The Wolf Of All Streets host Scott Melker.

The situation in July was sharply altered by the filing of BlackRock’s application for a Bitcoin ETF. After this, Grayscale’s GBTC shares rose by 57%, and the discount to NAV narrowed from 41.7% to 29.3%.

The momentum in recent days has been aided by the absence of an appeal by the SEC of the ruling in the case against Grayscale.

In late August, a U.S. court granted the asset-management company’s petition against the regulator over the refusal to convert GBTC into a Bitcoin ETF. The appellate court ordered the Commission to reconsider its decision.

Bloomberg analyst James Seyffart believes negotiations between Grayscale and the SEC will begin in the next two weeks.

According to Fox Business, on October 15 representatives of the asset manager reminded that the court would issue the final mandate within seven calendar days.

“The team remains ready to convert GBTC into an ETF promptly after SEC approval. We will provide additional information later,” according to Grayscale.

?NEW: Statement from @Grayscale on the @SECGov’s decision to not seek a rehearing:

“The Federal Rules of Appellate Procedure’s 45-day period to seek rehearing has now passed. The Court will now issue its final mandate within seven calendar days. The Grayscale team remains…

— Eleanor Terrett (@EleanorTerrett) October 15, 2023

On October 12, Ark Invest made changes to its joint application with 21Shares to register a spot Bitcoin ETF. Bloomberg analyst Eric Balchunas saw this as a “good signal.”

Earlier, former SEC lawyer John Reed Stark ruled out approval of a spot Bitcoin ETF. However, Bernstein and former SEC chairman Jay Clayton assessed the prospects for a fresh wave of contenders as high.

Former BlackRock director Stephen Shonfield suggested the agency would approve the instrument within three to six months.