As the U.S. Securities and Exchange Commission (SEC) seems closer to approving the first spot Bitcoin ETFs in the country, the demand for Grayscale’s Bitcoin Trust (GBTC) has increased. GBTC is a fund that holds Bitcoin and allows investors to gain exposure to the cryptocurrency without directly owning it. However, GBTC often trades at a different price than its underlying asset, which is called the net asset value (NAV). Sometimes, GBTC trades at a premium, meaning it is more expensive than its NAV, and sometimes it trades at a discount, meaning it is cheaper than its NAV.
According to YCharts, GBTC’s discount to NAV has shrunk to 15.87% as of Oct. 13, which is the lowest level since December 2021. This means that investors are willing to pay more for GBTC than before, as they anticipate that the SEC will soon approve one or more spot Bitcoin ETFs. A spot Bitcoin ETF would track the price of Bitcoin directly, unlike GBTC, which is a trust that charges fees and has restrictions on redemption. A spot Bitcoin ETF would also offer more liquidity and accessibility to investors, as it would trade on major stock exchanges.
The market’s optimism about spot Bitcoin ETFs was boosted by the recent court ruling that overturned the SEC’s rejection of Grayscale’s application to convert GBTC into an ETF. The SEC did not appeal the decision within the 45-day period, which means that the court will issue its final mandate within seven days. Grayscale stated that it is ready to convert GBTC into an ETF as soon as the SEC approves it.