The Grayscale Bitcoin Trust’s (GBTC) share price soared past $16 for the first time since May on Tuesday, fueled by hopes about the fund’s conversion into an exchange-traded fund (ETF). This optimism followed the investment management firm BlackRock’s filing for a spot bitcoin (BTC) ETF.
As GBTC shares rose to around $15.9, a 24% gain since Thursday, the day of BlackRock’s filing, GBTC’s discount on its share price relative to net asset value also narrowed. CoinDesk’s calculations indicate that the discount reached 33% at one point, the lowest since September last year and less than the 34% recorded in early March.
The surge in GBTC’s share price was driven by investor optimism regarding redemption possibilities and Grayscale’s chances of winning an ongoing lawsuit against the U.S. Securities and Exchange Commission (SEC) concerning the fund’s ETF conversion. GBTC currently does not allow redemptions, which has resulted in a discounted price.
Macro analyst Noelle Acheson pointed out that many look at BlackRock’s conviction as a signal that Grayscale could win against the SEC. This has led speculators to place their bets on ETF approval in order to capitalize on potential redemption opportunities in the future.
However, Acheson also noted that even if Grayscale wins the case, GBTC’s immediate conversion into an ETF is not guaranteed, as SEC chairman Gary Gensler could still employ other measures to fight such a rollout. Nevertheless, the hope for redemption is stronger than ever among GBTC holders.
Rumors of another investment management giant, Fidelity, filing for a spot BTC ETF or potentially acquiring Grayscale have further fueled such optimism. Although Fidelity has not made any public announcements regarding such plans, these developments signal a growing interest in the cryptocurrency space among traditional investment management firms.
It’s clear that the market is responding positively to news about potential ETF adoption, and many investors are keeping a close eye on how the Grayscale-SEC situation unfolds. However, one should not discount the regulatory measures that may still be at play in this process, as the outcome may not be a smooth ride towards widespread ETF adoption.
Ultimately, these recent events highlight the ongoing conflict between innovative financial products and regulatory bodies attempting to ensure investor safety. With each new development, the stakes for Grayscale, BlackRock, Fidelity, and other traditional investment firms rise, as they strive to bridge the gap between traditional finance and the rapidly-evolving world of blockchain and cryptocurrency.
Source: Coindesk
