The gap between Bitcoin’s price and GBTC shares has narrowed after the SEC rejected Grayscale’s application to convert its trust into an exchange-traded fund (ETF).
In the last year, many investors reportedly profited from the anticipation that the U.S. Securities and Exchange Commission (SEC) would greenlight a product directly pegged to the value of Bitcoin (BTC).
However, after a U.S. Court of Appeals mandated the SEC to reassess its refusal to greenlight Grayscale Bitcoin Trust’s (GBTC) application to transform into an ETF, the discount on GBTC shares to the value of the underlying Bitcoin slimmed down to approximately 17%, according to the Wall Street Journal.
GBTC, which manages $16.1 billion in assets, provides investors with exposure to Bitcoin as a security. Each share represents ownership of a fraction of Bitcoin, equal to 0.00090040 of a complete coin, which was priced at $24.49 at the market’s inception.
According to analysts, Bitcoin’s mini-surge this year and the diminishing discount have more than doubled the value of GBTC shares in 2023.
However, the GBTC-to-ETF transition is not without potential hurdles. The SEC now has a short window to respond to the court’s decision. The potential for the agency to appeal, along with the possibility of further prerequisites stipulated by the court’s final order, adds uncertainty to the process.
Moreover, the SEC has d
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Author: Julius Mutunkei
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