Grayscale's GBTC Stock Narrows Spread with Bitcoin to Lowest Since May 2022
The price of GBTC stock is recovering significantly, benefiting from news of BlackRock's Bitcoin ETF filing, helping to narrow the gap between stock price and BTC to its lowest since May 2022.
Grayscale's GBTC Stock Narrows Spread with Bitcoin to Lowest Since May 2022
According to data from Ycharts, the spread of Grayscale Bitcoin Trust (GBTC) compared to the underlying Bitcoin asset is currently -27%, the lowest since May 2022, driven by news of financial giant BlackRock's application for a Bitcoin ETF.
GBTC is a fund product issued by Grayscale where the company holds a certain amount of Bitcoin (BTC) in the Grayscale Bitcoin Trust (GBTC). Investors, both individual and institutional, can purchase GBTC shares through U.S. brokerage accounts, making it a popular vehicle for indirect exposure to Bitcoin.
During the 2017-2020 period, GBTC prices consistently traded higher than the market price of BTC, at times exceeding by up to 100%. However, towards the end of last year, amidst market turbulence triggered by the FTX collapse, the spread between GBTC and BTC widened to a record -50% and has maintained around -40% until recently. (What is BTC?)
At the end of 2021, Grayscale applied to convert GBTC into a Bitcoin spot ETF, but the U.S. Securities and Exchange Commission (SEC) rejected the application citing market instability concerns.
Recently, however, the SEC granted approval for Bitcoin futures ETFs with 2x leverage. Grayscale has filed an appeal criticizing the SEC for its "inconsistent actions," arguing that futures products pose even greater risk.
Meanwhile, after initial rejections by the SEC, BlackRock and Fidelity have resubmitted their applications. It's worth noting that the SEC has yet to approve any Bitcoin spot ETFs.
