Grayscale Bitcoin Trust (GBTC), the largest institutional investment vehicle for Bitcoin (BTC), is now trading at a discount of just 17% below the BTC/USD price parity, according to data from CoinGlass. This marks a significant improvement for GBTC, which has been experiencing losses for nearly two years.
The fortunes of GBTC started to turn around when news broke that BlackRock, the world’s largest asset manager, planned to file an application for the first Bitcoin spot price-based exchange-traded fund (ETF) in the United States. This was welcome news for Grayscale executives, who were already engaged in a legal battle with regulators over converting GBTC into a spot ETF. As of yet, the U.S. Securities and Exchange Commission has not approved any spot ETF applications and has recently delayed decisions on multiple projects.
Despite the lack of approval for a spot ETF, Grayscale achieved a significant victory last month in its legal battle with the SEC. This win provided a boost to the industry and contributed to the improved performance of GBTC. The discount of GBTC shares to Bitcoin’s price, once referred to as the “GBTC Premium,” has now decreased to just 17.17%, the lowest level since December 2021.
Previously, the premium had turned negative, meaning GBTC shares were trading at a discount to net asset value. At one point, this discount reached nearly 50%. The CoinGlass chart comparing GBTC premium, asset holdings, and BTC/USD shows this trend.
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While GBTC has seen improvements, the price of BTC continues to decline. At the time of writing, BTC was trading at under $25,500, and market data indicates that it is testing levels not seen in the past six months. September is historically a weak month for BTC/USD, often experiencing losses of up to 10%. Traders and analysts, such as CryptoCon, believe that October tends to be a bullish month for Bitcoin, and they are watching for signs of life from the cryptocurrency, particularly in late November during prehalving years.
There is a theory among some that Bitcoin’s price experiences a “bull run launch” every four years, with November 28 being the date most commonly associated with this pattern. This theory suggests that the price of Bitcoin reaches an all-time high on this date. CryptoCon’s chart, annotating the BTC/USD performance, supports this theory.
It is important to note that this article does not provide investment advice or recommendations. Investing and trading carry risks, and readers should conduct their own research before making any decisions.
In conclusion, Grayscale’s Bitcoin investment vehicle, GBTC, is currently trading at a discount of only 17% below BTC price parity, marking a significant improvement from previous losses. However, the price of BTC itself is still declining, and September is historically a weak month for its performance. Traders and analysts are watching for signs of a bullish trend, particularly in late November. It is crucial for individuals to conduct thorough research and assess the risks involved before making any investment decisions.
