Grayscale Discount Sinks to Its Lowest in 18 Months on Bets for GBTC Conversion to Bitcoin ETF

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Last Updated on January 9, 2024 by Bitfinsider

The discount on the Grayscale Bitcoin Trust (GBTC), the world’s biggest bitcoin (BTC) fund, has dropped to its lowest level since April 2021, ahead of a planned conversion to a spot bitcoin exchange-traded fund (ETF).
According to data, the discount went as low as 5.6% on Monday, the lowest level since June 2021. The fund has traded at a discount since February 2021, peaking at over 50% in December 2022, although prospects of an ETF approval and growing bitcoin sentiment have slowly reduced the gap.

It closed on Monday at $39. As of Tuesday, each GBTC share had $41.86 in bitcoin. The trust lacks a built-in market mechanism to maintain the GBTC share price near to the underlying value of bitcoin, allowing traders to exploit discounts and premiums as part of a trading plan.

As of Tuesday, GBTC is one of the few options for stock traders in the United States to obtain exposure to bitcoin price swings without actually purchasing the cryptocurrency.

A discount might be seen as a negative indication since it indicates diminishing interest in bitcoin among traders, while a premium indicates demand for bitcoin.

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