GBTC Shares Nearly Back to Parity with bitcoin Price

Shares for the Grayscale bitcoin Trust (GBTC) – the world’s largest bitcoin fund – are almost equal to bitcoin (BTC)’s price after trading at a low value for the past two years.

This reflects confidence in Grayscale’s efforts to convert its fund into a bitcoin spot ETF.

SEC’s Positive Meetings Lead to Reduction in GBTC’s Discount

Starting on Wednesday night, GBTC’s discount to NAV ratio reduced to as low as 8.6%, according to Bloomberg ETF analyst Eric Balchunas.

The discount shows the difference between the market cap of GBTC’s shares versus the total value of all BTC held by the trust.

Grayscale’s website reports that the fund holds $33.75 in BTC per share, compared to a market price of $31.21 right now – a mere 7.5% discount as of Friday.

The reduction was likely prompted by their updated filings/SEC meeting on Wednesday, the analyst said.

Executives from Grayscale, BlackRock, and others held meetings with the SEC’s Division of Trading and Markets to discuss their respective ETF applications.

The meetings concerned how fund managers would redeem shares of their trusts for underlying BTC whenever the shares began trading at a premium or discount to NAV. The SEC wants an in-cash redemption model that doesn’t require issuers to directly touch BTC.

Rising Confidence in GBTC

This trend has increased investor confidence that the agency might finally be willing to approve an ETF, inviting investors to buy both GBTC and BTC. An ETF is expected to invite major institutional flows into BTC and will immediately restore the value of GBTC shares to that of the BTC they represent.

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Back in December 2022, GBTC shares traded at a discount from their underlying BTC at just $8 per share.

Bloomberg analysts like Balchunas believe a bitcoin spot ETF is 90% likely to be approved by January 10.

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By Team