- The discount on Grayscale’s fund known as Bitcoin Trust continued to narrow as of November 27, likely due to increasing expectations for spot Bitcoin ETFs.
- The discount to Net Asset Value (NAV) is considered a significant metric to determine the difference between a fund’s trading price and the value of its underlying asset.
- Bloomberg ETF expert Eric Balchunas noted that the contracting discount on GBTC indicates an accumulation story towards the acceptance of a spot Bitcoin ETF by the SEC.
The NAV discount rate in Grayscale’s Bitcoin fund decreased to 8%: What does the NAV discount in the GBTC fund mean?
Discount Rate in GBTC Contracts to 8%
The discount on Grayscale’s Bitcoin Trust (GBTC) continued to narrow as of November 27, likely due to increasing expectations for spot Bitcoin ETFs. The discount on GBTC’s Net Asset Value (NAV) has dropped to 8%, a situation seemingly supported by industry excitement over a series of spot Bitcoin ETF applications from issuers like BlackRock and the belief among crypto advocates that the SEC is getting closer to approving such crypto-based financial products for the first time.
The discount to NAV is considered a significant metric to determine the difference between a fund’s trading price and the value of its underlying asset. The decline to these levels marks a new two-year low not seen since the end of 2021 when BTC and the overall crypto market reached all-time highs. Previously, the discount on Grayscale’s BTC fund had dropped to 15.8% by mid-October 2023.
Bloomberg ETF expert Eric Balchunas noted that the contracting discount on GBTC indicates an accumulation story towards the acceptance of a spot Bitcoin ETF by the SEC.
“As the discount on GBTC quickly becomes one of the top 5 ETF charts of the year, it is not only visually striking but also a graphical representation of the slow-growing optimism over the past six months towards the approval of a spot ETF,” said Eric Balchunas.
The SEC provides little information on the matter.
The SEC has only released a statement indicating that applications are under review, but issuers like Grayscale, ARK Invest, WisdomTree, among others, have made amendment applications for their initial proposals for a spot Bitcoin ETF.
Crypto advocates and ETF experts suggest that updated applications indicate positive discussions with the Securities and Exchange Commission (SEC) regarding the approval of products that could inject billions of dollars into Bitcoin.
