Grayscale’s GBTC discount rate approaches zero for the first time since February 2021 | CoinDesk JAPAN

At Grayscale Bitcoin Trust (GBTC), the world’s largest Bitcoin investment fund, the discount to net asset value (NAV) has narrowed to 0% for the first time since February 2021.

Grayscale received approval from the U.S. Securities and Exchange Commission (SEC) on the 10th to convert GBTC into a Bitcoin (BTC) spot ETF (exchange traded fund). Trading began on .

Eliminating discounts is a relief for the industry

Since February 2021, GBTC has been trading at a discount to the price of Bitcoin held, and in December 2022, it recorded the largest discount rate ever of nearly 50%. As expectations for ETF approval surfaced last summer, and as Bitcoin sentiment improved, GBTC’s discount to net asset value began to narrow significantly.

The discount had fallen to 5.6% on Monday, before the SEC approved GBTC’s conversion into an ETF.

“The convergence of GBTC to net asset value is a huge relief for the industry and marks the transition of the industry to a new stage of maturity,” said Sean Farrell, head of digital asset strategy at financial advisory firm FundStrat. It is a symbol of “This product, GBTC, has caused a lot of unnecessary pain over the past few years for obvious reasons.”

The cause of the discount is the structure of the fund.

The reason for the discount is due to the nature of the fund. GBTC functioned similarly to a closed-end fund. That is, there was no inherent arbitrage mechanism that allowed market makers to issue and redeem funds at their discretion.

“Bitcoin has always existed in trust, but the lack of a redemption mechanism has resulted in a significant discount to the value of the underlying asset,” Farrell said. “Most importantly, not only did the underperformance of the benchmark harm many retail investors, but it also led to massive credit destruction as the product was used as collateral across the industry. ” he explained.

Matt Kunke, crypto asset research analyst at GSR, said in an interview with CoinDesk that liquidity was previously only available over the counter in the secondary market, but now that GBTC has been converted into an ETF, , pointed out that authorized participants (APs) can now issue and redeem ETFs at net asset value, linking the market price of the ETF to net asset value. “As a result, premium discounts are likely to remain only a few basis points above par.”

Looking ahead, Farrell said it will be interesting to see what the discount to net asset value of the Grayscale Ethereum Trust (ETHE) will be, as it seems increasingly likely that a physical Ethereum ETF will eventually be approved. Ta.

｜Translation and editing: Rinan Hayashi
｜Image: TradingView
｜Original text: Grayscale’s GBTC Discount Closes to Zero for First Time Since February 2021