Optimism Growing for Bitcoin ETF After Grayscale Court Win
The figures and percentages of Bitcoin investment products often weave a tale more intricate than meets the eye. Consider the dwindling disparity between Grayscale Bitcoin Trust’s (GBTC) price and Bitcoin’s intrinsic value.
As of today August 30, the discount dip is a notable 18.06%—its lowest since December 2021—underscoring Grayscale’s mounting influence as it boasts holdings surpassing a remarkable $17.10 billion in Bitcoin.
A Legal Leap Forward for Grayscale
The winds shifted favorably for Grayscale following its monumental legal win against the SEC. The veritable DC Circuit Court declared that the Commission seemed to be grasping at straws when it attempted to halt GBTC’s transition to a spot Bitcoin ETF, saying it “lacked a consistent statement” for such an action.
But let’s get down to the brass tacks. One GBTC share is equivalent to 0.00090089 BTC. Before the news yesterday, the Bitcoin value for each GBTC share was $25.09, and after the price touched lower at $20.56.
This scenario isn’t new… GBTC’s shares have consistently shown a discount to Bitcoin’s market value since early 2021, with the gulf widening dramatically to almost 50% in December 2022.
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Historically, the inability to effortlessly transition GBTC into Bitcoin within Grayscale’s closed-end framework has dimmed its allure, especially when set against glittering alternatives such as the ProShares Bitcoin Strategy ETF, or even leveraged futures Bitcoin ETFs.
To further spice things up, Europe has opened its arms to its inaugural spot Bitcoin ETF, christened Jacobi FT Wilshire Bitcoin ETF, which debuted on the Amsterdam stock exchange this August 15th.
The SEC’s Tightrope Walk
The clock is ticking for the SEC, as looming deadlines approach. They face the onerous task of either greenlighting, rejecting, or opting to delay the ETF applications submitted by industry giants such as BlackRock, VanEck, and Invesco, among others—all before Labor Day.
Despite the court’s nod to Grayscale, the ball remains firmly in the SEC’s court, tasked with the monumental decision to approve, deny, or stall the Bitcoin ETF conversion. That said, it’s undeniable that the tides are changing.
Grayscale’s top brass, CEO Michael Sonnenshein, expressed that this legal triumph edges them “one step closer” to ushering in a spot Bitcoin ETF on American soil. Echoing his sentiments, Craig Salm, Grayscale’s Chief Legal Officer, envisions a future of collaboration with the SEC to navigate GBTC to NYSE Arca as a spot Bitcoin ETF.
