Key Points:
- Grayscale GBTC discount at a two-year low, currently -12.26%.
- Strong expectations for the approval of the first spot Bitcoin ETF.
- Grayscale’s lawsuit victory clears the path for a spot ETF and multiple ETF approvals.
The discount on the Grayscale Bitcoin Trust ($GBTC) has reached its lowest point since November 2021, potentially signaling growing investor confidence in the forthcoming approval of the first-ever spot Bitcoin ETF in the United States. This discount represents the percentage difference between the trading price of GBTC and its net asset value, which is closely tied to the price of Bitcoin (BTC).
The approval of a spot Bitcoin ETF is widely anticipated, with analysts estimating a 90% likelihood of it happening by January 2024. Grayscale’s application to convert GBTC into a spot ETF carries legal weight due to a recent verdict in a lawsuit involving the U.S. Securities and Exchange Commission (SEC). Among the 12 companies seeking spot Bitcoin ETF approvals, experts believe that the SEC may grant multiple approvals simultaneously to prevent any one company from gaining an unfair first-mover advantage.
Regarding direct ETF filings, the Ark 21Shares spot Bitcoin ETF application is scheduled for the earliest decision by the SEC, with a deadline of January 10. However, developments in the Grayscale lawsuit could lead to the conversion of GBTC into a spot ETF, alongside the approval of a batch of ETF applications. An important ruling on August 29, 2023, by the U.S. Court of Appeals for the District of Columbia Circuit paved the way for the Grayscale spot ETF approval.
The current GBTC discount stands at -12.26%, the lowest since November 2021, a significant contrast to the -48% discount observed in December 2022, following the FTX collapse, which had a detrimental impact on investor sentiment in the cryptocurrency market. This decrease in the discount reflects optimism among market participants, coinciding with mounting expectations of a Bitcoin ETF approval. Furthermore, the price of Bitcoin has risen by approximately 120% compared to a year ago.
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