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Grayscale Bitcoin Trust shares surge as SEC lets appeal deadline lapse

Grayscale Bitcoin Trust shares surge as SEC lets appeal deadline lapse
Grayscale's flagship fund has performed well so far this year, as spot Bitcoin ETF hopes grew. Credit: Rcc_Btn/Shutterstock
  • Shares in the Grayscale Bitcoin Trust popped by 10% on Monday.
  • GBTC’s discount to net asset value is 14%, having narrowed by 30% since June.
  • Grayscale is “operationally ready” to convert GBTC to a spot ETF.

Happy Monday!

The US Securities and Exchange Commission decided not to appeal Grayscale’s courtroom win in August. Shares in the asset manager’s flagship Bitcoin trust moved higher on Monday following the decision.

Here’s what it means for spot Bitcoin exchange-traded fund hopefuls.

Next steps

GBTC shares popped shortly after the open on Monday, following the SEC’s decision not to appeal against the ruling to overturn its rejection of Grayscale’s proposal to convert GBTC into a spot Bitcoin ETF on Friday.

“The Grayscale team remains operationally ready to convert GBTC to an ETF upon the SEC’s approval, and we look forward to sharing more information as soon as practicable,” a Grayscale spokeswoman told DL News.

After the deadline to seek a rehearing passed the appellate court will now issue its final mandate within a week, the spokeswoman said.

GBTC shares traded above $22 shortly after 2:30pm London-time, up 10% since the close on Friday, according to TradingView data.

The asset manager’s Bitcoin trust trades a discount to the Bitcoin it holds, and this narrowed leading up to Friday’s deadline.

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The discount to net asset value is currently 14%, according to Bloomberg data —its lowest since December 2021.

Grayscale’s trust tracks the price of the Bitcoin it holds, but doesn’t currently offer users the option to redeem shares. As a result, there is a disparity between its share price and the spot price of Bitcoin, or a discount.

The discount was around 44% as recently as June, but has narrowed significantly on positive spot Bitcoin ETF news.

The entrance of trillion dollar asset managers like BlackRock and Fidelity in June was the initial catalyst for this before the asset managers courtroom victory buoyed interested in the trust again.

The discount can be seen as an indicator of how likely it is that a spot Bitcoin ETF will be approved, Coinbase’s head of institutional research, David Duong, said last month.

Based on this logic there’s now a nearly 85% probability of approval.

Crypto market movers

  • Bitcoin was up 4.3% overnight, trading above $28,000.
  • Ethereum added 1.7% to trade around $1,580

What we’re reading

Adam Morgan McCarthy is Markets Correspondent at DL News. Got a tip? Reach out at adam@dlnews.com