- Discount zone narrowed to 29.3%
- This is the best value from last July
- Prior to this, we reported that the trading volume for this position quadrupled
In mid-June, a subsidiary of BlackRock filed an application to register a spot bitcoin ETF. This set off a chain reaction, as a result of which the BTC rate, as well as the cost of derivative products from the asset, increased significantly. In particular, this affected Grayscale’s GBTC trust.
We have previously reported that the trading volume for this position has quadrupled. In just a few days, the figure rose from $16.1 million to $80 million on the back of the news of the application from BlackRock.
Experts explained this by the fact that the approval of a new exchange product would provide Grayscale with a “loophole” in a lawsuit with the SEC. Recall that the company had previously submitted an application to convert the trust into an ETF, but was refused.
At the same time, the GBTC rate continues to grow. In less than a month, the trust’s share price has increased by more than 39%, from $13.26 to $20.14 at the time of writing. The trend movement is clearly visible on the chart:
Over the same period, BTC rose in price by more than 21%. But that’s not all. For the first time since July last year, the discount zone (the difference in the market price of shares to the bitcoin rate) narrowed to 30%. The trust is currently trading with a drawdown of 29.3%.
By comparison, prior to BlackRock’s bid, the discount zone was 41.7%. The trust traded at a premium until 2021. Grayscale’s efforts to convert it into an ETF were precisely aimed at minimizing losses and narrowing the discount zone.
Remarkably, since the beginning of the year, GBTC has grown by more than 144%. BTC, in turn, only by 83.7%. If the application from BlackRock is approved, further narrowing of the discount zone is not ruled out.