Grayscale’s GBTC Discount Nears 2-Year Low; Will SEC Eliminate First Mover Advantage and Approve All ETFs?

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According to data from YCharts, the Grayscale Bitcoin Trust (GBTC) discount is currently at 12.26%, its lowest since November 2021. This development may indicate investor confidence in approving the first-ever spot Bitcoin ETF in the United States. The GBTC discount represents the percentage of GBTC trading above or below its net asset value (NAV), which in this case is the Bitcoin (BTC) price.

So, is the extra 10% discount worth not holding direct BTC and waiting on Blackrock approval? Let’s understand the GBTC Discount mania.

The SEC has entered into negotiations with Grayscale Investments over the details of the company’s application to convert its trust product GBTC into a spot Bitcoin ETF. All parties are currently actively advancing the application process. The SEC declined to comment on this new…

— Wu Blockchain (@WuBlockchain) November 9, 2023

GrayScale’s Discounted Stance

However, the industry is hooked on the news that the SEC has initiated talks with Grayscale about converting GBTC into an ETF. Since their court victory, Grayscale has been in discussions with key SEC divisions. Grayscale’s CLO, Craig Salm, emphasized their focus on constructive engagement, acknowledging that there are still details to iron out. He noted that other contenders like BlackRock and Fidelity are also advancing in their registration negotiations with the SEC. Salm expressed confidence, stating it’s a matter of “when, not if.”

In what could be a sign of market confidence in the approval of spot Bitcoin ETF, the Grayscale Bitcoin Trust (GBTC) discount is the lowest in a long time.

Grayscale GBTC Conversion Is Heading To BTC Boom, If

The SEC lawsuit judgment makes Grayscale’s filing to convert GBTC into a spot Bitcoin ETF legally binding, even if analysts chart the odds of a 90% chance of approval by January 2024. There are 12 companies seeking spot Bitcoin ETF approval. Therefore, analysts expect the US SEC will approve them simultaneously to prevent a first-mover advantage.

The US SEC must decide on the Ark 21Shares spot Bitcoin ETF by January 10. The Grayscale case could lead to the GBTC conversion and additional ETF filings. A US Court of Appeals for the District of Columbia Circuit approved Grayscale’s spot ETF on August 29, 2023.

BTC is predicted to reach $69K due to GBTC conversion excitement, yet $ETHE’s discount is 19% today, a 19-month low, down from 59% in December. Do you believe the SEC will struggle to choose ETH over Bitcoin?

GBTC’s discount to NAV (the underlying Bitcoin) is now the lowest that it’s been since November 2021 — currently at 12%.

Looks like the market is pricing in very high probability of BTC ETF approval at this point.

— Will (@WClementeIII) November 8, 2023

GBTC Discount: Is it Worth Waiting?

The current GBTC discount has its own story as it stands at -12.26%, the lowest since November 2021, compared to a much more significant -48% discount in December 2022 following the FTX collapse. This decrease in the discount percentage reflects growing optimism among market participants, driven by the rising expectation of a Bitcoin ETF approval, along with Bitcoin’s price being around 120% higher compared to a year ago.

Do you expect Grayscale could have any advantage with the conversion vs launch? Does the GBTC discount go away in a flash?

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