Amid the unfolding drama and anticipation in the crypto world, the more-than-$19 billion Grayscale Bitcoin Trust’s (GBTC) discount to net asset value (NAV) has been progressively thinning. This interest has been propelled by BlackRock’s daring move to open a United States-based spot bitcoin ETF (exchange-trade fund), a leap that caused GBTC’s discount to NAV to plummet. A 50% rate was reported last year, with most of 2023 hovering around 40%. However, after BlackRock’s mid-June filing to the U.S. Securities and Exchange Commission (SEC), the discount took a nosedive and reached a slim 26% at its lowest. As of the most recent data, it’s hovering at around 27%.
BlackRock’s audacious move has inspired other key players in the field. This ripple phenomenon included Fidelity, another powerhouse in asset management, stimulating waves of speculation about a conducive environment for a bitcoin-spot ETF. This fresh optimism has led to a purchasing streak for the severely discounted GBTC, which has been biding its time to become a spot bitcoin ETF for almost two years. However, the SEC has proven to be a formidable obstacle, culminating in legal action from Grayscale, with a judgement expected in the next quarter.
Meanwhile, the Grayscale continued to bolster its case, pointing out that the SEC gave a green light to a highly speculative bitcoin futures-based ETF late June. As a result, the cautious optimism around the approval of a bitcoin-spot ETF is palpable.
However, the seasoned among the investors might want to reserve their judgement till the end. As Opimas CEO Octavio Marenzi stated, he couldn’t suppress a chuckle when news about BlackRock’s spot bitcoin ETF broke out. Arguably, this was because BlackRock aims to entrust its crypto holdings to Coinbase, a company which is currently embroiled in a legal skirmish with none other than the SEC, thus mirroring complexity within the regulatory landscape.
The universe of cryptocurrencies is a wild rollercoaster, with dips and elevations catalyzed by big names like BlackRock or Fidelity. Amidst the highs and lows, the savvy investors would do well to keep their eyes on the long-term horizon and not be beguiled by temporary oscillations.
Source: Coindesk
