GBTC Discount Shrinks as Bitcoin Price Surges

The Grayscale Bitcoin Trust (GBTC), one of the largest and most popular crypto investment vehicles, has seen its discount narrow significantly in recent days as bulls continue to drive its price higher. According to data from Kaiko, a blockchain intelligence platform, the GBTC discount, which measures the difference between the market price and the net asset value (NAV) of the trust, is at its most narrow in years, at just 8% as of yesterday.

The GBTC discount is at its most narrow in years, at just 8% ahead of a possible ETF conversion? pic.twitter.com/7sFBduTf2m

— Kaiko (@KaikoData) December 5, 2023

This means that investors can buy GBTC shares at a lower premium than usual, compared to the underlying value of the Bitcoin held by the trust. The narrowing of the discount is seen as a bullish sign for GBTC, as it indicates a higher demand and a lower supply of shares in the secondary market. 

Moreover, it also reflects the anticipation of a possible conversion of GBTC into an exchange-traded fund (ETF), which would allow investors to redeem their shares for Bitcoin at any time, rather than waiting for a six-month lock-up period.

Investors Eye Potential Bitcoin ETF Conversion

Grayscale, the company behind GBTC, has recently filed to convert the trust into an ETF, pending regulatory approval from the US Securities and Exchange Commission (SEC). If approved, GBTC would become the first Bitcoin ETF in the US, which could attract more institutional and retail investors to the crypto space.

Meanwhile, GBTC’s price has also been on the rise, following the uptrend of Bitcoin in the past week. According to TradingView, GBTC was up 4.35% and stood at $35.10 at press time, after breaking above the major resistance level of $32 over the past 72 hours. Technical indicators on GBTC’s daily chart suggested that its price may continue to climb in the next few days, possibly reaching as high as $40.15.

One of the major buyers of GBTC in recent months has been ARK Invest, a leading innovation-focused investment firm led by Cathie Wood. According to its latest filings, ARK Invest has offloaded some of its Coinbase shares and increased its exposure to GBTC, signaling its confidence in the trust and its potential ETF conversion.