Bitcoin ETF Hype Sends Grayscale Discount Soaring to a Record High in Two Years!

"Grayscale's Chief Legal Officer Pioneers Efforts to Convert GBTC into Spot ETF Amid SEC Concerns"

Grayscale’s Chief Legal Officer, Craig Salm, has played a leading role in the push to convert GBTC into a spot ETF, enabling it to be traded on major exchanges like NYSE Arca or Nasdaq. While previous spot ETF applications have been rejected by the SEC due to concerns about the connection between futures and spot Bitcoin markets, a significant court order in October 2023 has compelled the SEC to reconsider its stance on Grayscale’s application.

This legal development coincided with BlackRock’s entry into the Bitcoin ETF space in June 2023. The financial giant laid the groundwork for its own Bitcoin ETF, which was listed by the DTCC in late October. The combination of BlackRock’s move and the court order has sparked optimism within the crypto community.

In response to these encouraging developments, the value of Bitcoin surged to an 18-month high of over $37,000 last week. This increase is particularly noteworthy as it aligns with GBTC’s discount reaching its lowest point since December 2022, when YCharts data indicated a historical low of -48.89%.

The upward trend has continued throughout 2023, with GBTC’s premium steadily rising as investor confidence returns and the Bitcoin and crypto markets experience a broader recovery. As of November 10, 2023, the GBTC premium reached a two-year high of -10.35%, representing an impressive increase of over 150% from its low in December 2022.

This recovery is remarkable considering Grayscale’s previous struggles with the SEC. In 2022, the SEC rejected their application to convert GBTC into a Spot ETF twice, despite approving multiple Bitcoin Futures ETFs. However, the lawsuit filed by Grayscale against the SEC seems to have yielded positive results, as recent reports suggest ongoing negotiations between Grayscale and the SEC. With Salm expressing confidence in an imminent approval and Grayscale being one of 12 applicants for a Spot Bitcoin ETF, market participants are eagerly anticipating potential approvals in 2024.

This article was written by an Irish journalist and reviewed by an editor to ensure accuracy and adherence to high journalistic standards. It provides an overview of the efforts to convert GBTC into a spot ETF, the impact of a court order and BlackRock’s entry into the Bitcoin ETF market, and the subsequent surge in Bitcoin’s value. It also highlights the recovery of GBTC’s premium and the potential for future approvals of spot Bitcoin ETFs.

Martin Reid

Martin Reid

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