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GBTC Discount Continues to Narrow as Investors Await ETF Conversion Decision

source-logo  coindesk.com 18 October 2023 07:00, UTC

The discount for Grayscale’s Bitcoin Fund (GBTC), the world’s largest bitcoin investment vehicle, continued to narrow on Tuesday amid optimism that a bitcoin spot exchange-traded fund (ETF) might be on its way in the U.S.

Shares in GBTC narrowed to a 12% discount to the trust’s net asset value (NAV) on Tuesday, the closest it has traded to NAV since December 2021, according to data from TradingView.

GBTC has traded at a discount since February 2021 and reached a record low of nearly 50% in December last year during the prolonged crypto winter. The company said on Monday it is “operationally ready” to convert GBTC into an ETF upon the SEC’s approval.

The narrowing comes as Grayscale awaits a decision from the U.S. Securities and Commission Exchange on whether it can convert the fund into an ETF. On Friday, the SEC failed to appeal its August court loss over Grayscale’s application to convert GBTC into a spot ETF, igniting some hope among investors that the SEC might approve the application.

However, it is possible that the SEC could now come up with new reasons to reject Grayscale's bid to convert or request an En banc appeal.

Grayscale is among other asset managers who have applied to the SEC for bitcoin spot ETFs, including the likes of BlackRock, Fidelity and WisdomTree.

GBTC is the largest cryptocurrency fund in the world, currently with $16.7 billion in assets under management.

Digital Currency Group is the parent company of Grayscale and CoinDesk.