The Grayscale Bitcoin Trust chart suggests a big move could be coming soon, as GBTC might have broken out of resistance.
Grayscale’s Trust controls a large amount of Bitcoin and offers its shares to investors interested in a regulated way to get an exposition on Bitcoin or don’t want to handle Bitcoin directly. Unlike regular Bitcoin, the price of the Trust’s shares can be traded at a premium or discount to the active itself, depending on investor sentiment.
Recently, the price of GBTC has been making higher lows against BTC.
The narrowing of the discount between the market price and the trust’s Net Asset Value (NAV) might signal a change in market outlook and possibly greater demand for the trust’s shares. Simply put, the GBTC’s discount or premium can serve as a proxy for investor sentiment surrounding the trust. Since late February 2021, GBTC has been trading below its NAV, allowing investors to access Bitcoin at a cost lower than its actual value. If a spot Bitcoin ETF is approved, the value of shares in Grayscale’s Trust is expected to follow closely the actual price of Bitcoin.
Meanwhile, on Friday, the U.S. Securities and Exchange Commission (SEC) revealed it opted not to appeal a recent court ruling in favor of Grayscale’s plans to change its Bitcoin Trust into a spot Bitcoin ETF (Exchange-Traded Fund). While it’s not an outright approval of Grayscale’s conversion into spot Bitcoin ETF, it might signal a potential shift in the regulatory attitudes toward Bitcoin ETFs.
Grayscale’s court win could set a precedent for other spot Bitcoin ETF applicants. If Grayscale gets the final nod, it would be difficult for the SEC to say no to similar applications. Closing the official appeal window without any action from the SEC is seen as a sign of progress for the broader industry.
Currently, at least seven spot Bitcoin ETF applications expect the regulator’s approval. According to Bloomberg analysts, there’s a 75% chance that a spot Bitcoin ETF will be approved this year and 95% by the end of 2024.