Introduction
The Grayscale Bitcoin Investment Trust (GBTC) has experienced a significant increase of 57% following the filing of a spot Bitcoin Exchange Traded Fund (ETF) by BlackRock, a leading asset management company, on June 15.
A Look at GBTC’s Market Performance
The value of GBTC shares rose from $13 on June 15 to $20.46 at the time of this review, according to data from TradingView. During the same period, the price of Bitcoin increased by 21%, reaching a recent price of $30,300.
GBTC’s Equilibrium To Net Asset Value
The discount of GBTC shares to their net asset value (NAV) has dropped below 30% for the first time since July of the previous year. The current discount stands at 29.3%, according to data from The Block’s data dashboard. Previously, this discount was 41.7% before BlackRock’s spot Bitcoin ETF application, and it has been decreasing steadily. GBTC initially traded at a premium prior to the crypto credit crunch of 2021.
Implications of a BTC Spot ETF
Last year, the United States Securities and Exchange Commission (SEC) rejected Grayscale’s proposal to convert GBTC to a spot ETF, leading the asset manager to sue the agency. However, the filing by BlackRock, along with applications from Invesco, WisdomTree, Valkyrie, and Fidelity, has injected new hope into the conversion process. This could be a significant factor contributing to GBTC’s impressive performance.
A Research Analyst’s Take
“Grayscale had their proposal rejected last year to convert GBTC into a spot Bitcoin ETF, and although Grayscale has been contesting the verdict, there hasn’t been a final consensus,” explains Rebecca Stevens, a research analyst at The Block Research. She observed an increase in GBTC’s daily trading following BlackRock’s filing. Stevens further noted, “Optimism for BlackRock being successful with their spot bitcoin ETF would then lead the way for Grayscale to get their non-redeemable trust shares converted.”
GBTC Versus Bitcoin – A Year-To-Date Review
Year-to-date, GBTC has outperformed Bitcoin, with a surge of 144.3% compared to Bitcoin’s price gain of 83.7%, according to TradingView data.
Some Key Takeaways
- GBTC has increased by 57% since BlackRock’s spot Bitcoin ETF filing on June 15.
- During the same period, Bitcoin increased by 21% to a current price of $30,300.
- GBTC’s discount to its net asset value is currently below 30%, which is the first time since July 2020.
- Before BlackRock’s ETF application, the discount was 41.7% and has been steadily decreasing.
- Year-to-date, GBTC has had a significant increase of 144.3% compared to Bitcoin’s price gain of 83.7%.
