The GBTC discount to NAV is down to 15.87% for the first time since December 2021, when Bitcoin was trading at an all-time high.

The discount on the Grayscale Bitcoin Trust (GBTC), Grayscale Investment’s flagship Bitcoin fund, narrowed further this week.

According to data from Ycharts, the GBTC discount to Net Asset Value (NAV) was down too 15.87% as of Oct. 13. 

The discount or premium to NAV calculates the amount that an exchange traded fund or closed end fund is trading above or below its net asset value. Until February 2021, GBTC had always traded at a premium to its NAV.

GBTC discount has resumed its narrowing and sits at 16.5%. In mid-June, when BlackRock filed for spot Bitcoin ETF, the discount was 43%. pic.twitter.com/qHSuVTdpOb

— unfolded. (@cryptounfolded) October 13, 2023

In December 2022, the discount had widened to nearly 50% following the market turmoil that ensued after FTX’s collapse a month prior.

Grayscale had applied to convert GBTC into a spot Bitcoin ETF, but was met with the same consequences of many other applicants looking to launch a Bitcoin ETF – a rejection from the U.S. Securities and Exchange Commission (SEC).

The crypto investment firm then sued the securities regulator over the denial of its bid to convert GBTC into a spot Bitcoin ETF. (Grayscale CEO Michael Sonnenshein gets into the details of the firm’s arguments against the SEC in this episode of Unchained.)

The lawsuit ended in a victory for Grayscale in August, when U.S. Court of Appeals Circuit Judge Neomi Rao granted Grayscale’s petition for review, meaning the SEC will have to re-evaluate its treatment of the application.  

Last week, Reuters reported that the SEC does not plan to appeal the court decision on Grayscale’s spot Bitcoin ETF application.

Now, several asset managers including BlackRock and Fidelity have applications for a spot Bitcoin ETF in the works. Although the SEC pushed the deadline for its decision on approving these products, the decision against appealing the verdict on Grayscale’s spot Bitcoin ETF has likely renewed optimism in the market as that deadline approached on Oct. 19.

That’s the bet

— The Wolf Of All Streets (@scottmelker) October 13, 2023