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Grayscale GBTC discount falls to 16% as SEC misses ETF appeal window

TL;DR

  • Grayscale’s GBTC discount to its net asset value (NAV) has reduced by close to 16%.
  •  The SEC’s failure to appeal means it has to consider its ruling, which could also be a denial of the GBTC ETF or a probable shift in the regulatory stance on ETF product investment.
  • Crypto investors are rooting for a BTC ETF to go live in 2024.

The evolving world of crypto is realizing new investment opportunities. Grayscale  Bitcoin Trust (GBTC) is among the favored firms for traditional investors seeking to invest in digital assets. Recent events in the digital market have shown that GBTC’s discount to its net asset value (NAV) has reduced by close to 16%. 

The discount fall comes in as the US Securities and Exchange Commission (SEC) missed its ETF appeal window. The market is now in a buzz, anticipating the Bitcoin Exchange-Traded Fund (EFT). 

Moreover, this has also shocked the entire crypto community as GBTC is employed in bridging the gap between traditional finance and the digital world.  Moreover, Bitcoin Exchange -Traded Funds (ETFs) approach full approval in the US. 

Current news on Grayscale GBTC

Currently, the investment vehicle Grayscale Bitcoin  Trust (GBTC) is trading at its lowest discount in the last 2 years. According to the YChart data of 13th October GBTC against Bitcoin’s NAV was leveled at 15.87%. The percentage measures the sum of mutual funds (ETF) that is now trading lower than its net asset value (NAV). 

The primary role of this is to track the metrics of how far a security is trading from its value. The discount reduction was witnessed when financial institutions and BlackRock filed to onboard Bitcoin ETFs in mid-June 2023. 

The discount dropped by 17.3% from June 15 to July 5. This was a recorded drop from 44% to 26.7%. A similar drop was recorded in December 2021 when Bitcoin peaked at its all-time high of $69,000 on November 10. 

The current drop to 15% is a near 2-year low on Friday, and this is in the past 22 months. Additionally, the discount has been dropping, recording a nearly 50% reduction since the beginning of the bear market late last year, from December. 

The SEC missing its appeal window

The latest proceedings followed the US Securities and Exchange Commission (SEC), missing its window to appeal against the District of Columbia Circuit Court of Appeal’s verdict in August. The verdict had overturned the SEC’s prior Bitcoin ETF proposal rejection. 

This was a huge win for Bitcoin ETF advocates. Moreover, it signaled a probable shift in the regulatory stance on ETF product investment. It challenged the SEC’s usual concerns on inverter protection as well as market manipulations

The verdict was to set aside the regulators’ decision to reject Grayscale’s ETF conversion attempts. The SEC had a chance to appeal the verdict until Friday midnight but never did. 

Grayscale reported a delivered statement on October 15 after noticing that the SEC failed to seek a rehearing, elapsing its 45-day grace period. As such, the court will issue its final mandate in the next 7 calendar days. 

As such, the SEC can now write up new reasons to decline the Grayscale bid to cover its  ETF. They could also file for an en banc appeal. Additionally, as the SEC engages with other spot-ETF applications, it’s discount diminished, but investors are onboarding Bitcoin ETF seeking their full approval. 

According to Noelle Acheson, the author of the Crypto Is Macro Now Newsletter, in the weekend edition, had some comments on the matter. The SEC’s failure to appeal means it has to consider its ruling, which could also be a denial of the GBTC ETF appeal. 

The president of the ETF store, Nate Geraci also commented on the field appeal by the SEC, stating that it could mean a potential spot for an ETF launch in early 2024. As such, this could mean good news for Grayscale as it grows its probability of taking the lead in the ETF market, dominating other issuers. This is fit, it manages to get its appeal to cover its trust into ETF approved.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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