Grayscale's GBTC Discount Shrinks Amid ETF Optimism Since July 2021

• Grayscale's Bitcoin Fund Discount Narrows on US ETF Approval Optimism
• GBTC Shares Narrow to Two-Year Record
• Contribution to the Narrowing of GBTC Shares
• SEC Memo Reveals Discussion with Grayscale
• Grayscale's Agreement with BNY Melon
• GBTC's Global Stand

Grayscale's Bitcoin Fund Discount Narrows on US ETF Approval Optimism

On Friday, Grayscale's Bitcoin$42,260 -0.64% Fund (GBTC), the most significant bitcoin investment vehicle worldwide, saw the discount reach its narrowest point since July 2021. This development arises from the growing optimism about the potential approval of a bitcoin spot exchange-traded fund (ETF) in the U.S.

GBTC Shares Narrow to Two-Year Record

GBTC shares reached a two-year record of an 8.6% discount to the trust's net asset value (NAV) on Friday, the nearest it has traded to NAV since July 2021, as evidenced by Ycharts data. The fund has been trading at a discount since February 2021 and dropped to record lows of almost 50% in December of the past year.

Contribution to the Narrowing of GBTC Shares

Eric Balchunas, an ETF analyst at Bloomberg, noted in a social media post on X (previously Twitter) that the narrowing is likely prompted by Grayscale's recently updated filings and the reported SEC meeting on Wednesday. Grayscale is presently awaiting a decision from the U.S. Securities and Exchange Commission (SEC) on whether it can convert the closed-end fund into an ETF. The company has reportedly been in talks with regulators this week regarding the detailing of the trust, sparking optimism. Grayscale has also suggested changing the fund's ticker from GBTC to BTC.

SEC Memo Reveals Discussion with Grayscale

A memo published by the SEC on Wednesday revealed that the asset manager met with the SEC to discuss the fund details Grayscale wants to convert into an ETF. The memo stated, The discussion concerned NYSE Arca, Inc.'s proposed rule change to list and trade shares of the Grayscale Bitcoin Trust (BTC) under NYSE Arca Rule 8.201-E.

Grayscale's Agreement with BNY Melon

According to a filing shared by financial lawyer, Scott Johnson, Grayscale has entered into a transfer agency and service agreement with BNY Melon. This agreement implies that the bank will serve as the agent for GBTC, facilitating the issuance and redemption of shares.

GBTC's Global Stand

GBTC stands as the largest cryptocurrency fund globally, currently holding $30.45 billion in assets under management as of November 22.

Edited by Jonathan Stoker