• Grayscale Bitcoin Trust (GBTC) discount to net asset value has fallen to its lowest level in a month.
• The closed-end fund’s discount had widened to 47% in mid-February but is now at 42%.
• Investors are hopeful that the discount will continue its recent narrowing should the courts be receptive to Grayscale’s ETF arguments.
Grayscale Bitcoin Trust (GBTC) Discount
The Grayscale Bitcoin Trust (GBTC) discount to net asset value has fallen to its lowest level in a month, currently sitting at 42%. In mid-February, the closed-end fund’s discount had widened to 47%, but investors are hopeful that the discount will continue its recent narrowing should the courts be receptive to Grayscale’s ETF arguments.
Oral Arguments Tuesday
Grayscale is appealing the SEC’s decision to deny the conversion of their trust into an exchange-traded fund, and oral arguments for their case are set for Tuesday. The company is preparing to argue that they were treated inappropriately compared with earlier decisions allowing bitcoin futures-based ETFs.
Investors Buying GBTC
Some investors have been buying GBTC ahead of Tuesday’s hearing, hoping for a positive outcome from Grayscale’s lawsuit against the SEC. GenTwo analyst Pablo Jodar said this buying can be seen as equivalent “to buying bitcoin at a discount” – though it comes with risk attached.
Laurent Kssis’ Views
Crypto trading adviser Laurent Kssis of CEC Capital said he believes “the market will react positively if regulators approve GBTC as an ETF,” adding that he expects more institutional money entering crypto markets if this occurs. He also noted that even without approval, there could still potentially be a strong inflow of capital into BTC as long as cryptocurrencies remain attractive relative to traditional assets like stocks and bonds.
Conclusion
Regardless of what happens during today’s hearing, investor interest in BTC remains high – and any outcome from this week’s court proceedings could shape sentiment either way in the weeks or months ahead.