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Grayscale's GBTC Discount Narrows Amidst Bitcoin ETF Anticipation

Oct 21, 2023 at 08:31 am

Grayscale's Bitcoin Trust (GBTC), recognized as the world's foremost bitcoin investment vehicle, has typically been traded at a markdown compared to the actual value of the Bitcoin it possesses.

The markdown on GBTC shrinks, according to TradingView.The markdown on GBTC shrinks, according to TradingView. 
As of Tuesday, the markdown for GBTC shares narrowed down to 12% below the trust's net asset value (NAV), signifying the closest proximity to trading at NAV since December 2021, as indicated by data sourced from TradingView.

Since February 2021, GBTC has consistently been subject to trading at a reduced value, hitting an unprecedented low of almost 50% in December of the same year amid the prolonged downturn in the cryptocurrency market. On Monday, the company declared its operational preparedness to shift GBTC into an Exchange Traded Fund (ETF) upon receiving approval from the U.S. Securities and Exchange Commission (SEC).

This reduction in the markdown aligns with Grayscale's expectations of a verdict from the SEC concerning the potential transformation of the trust into an ETF. Last Friday, the SEC opted not to challenge its legal setback from August concerning Grayscale's plea to convert GBTC into a spot ETF, instigating hope among investors for a potential green light from the SEC.

Grayscale is just one of several asset management entities that have forwarded applications to the SEC for Bitcoin spot ETFs, aligning with industry giants such as BlackRock, Fidelity, and WisdomTree.

Presently, with assets totaling $16.7 billion under its management, GBTC holds its position as the largest cryptocurrency fund on a global scale.

Read more: Bitcoin in Focus: Recent Trends and Insights

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