The discount on the Grayscale Bitcoin Trust (GBTC) has shrunk to its lowest points since July 2021 thanks in part to the excitement around ETFs.
YCharts data indicates that the discount between GBTC’s net asset value and its current discount is 10.35%. This is a considerable decrease from the record discount of almost 50% that occurred during the crypto winter that FTX caused in December of the previous year.
The decreasing discount coincides with rumours that Grayscale Investments and the US Securities and Exchange Commission (SEC) have been in talks for turning the trust into a spot Bitcoin ETF.
ETF Hype Persists: Grayscale Bitcoin Trust Discount at 10.35%,ETF Hype Persists: Grayscale Bitcoin Trust Discount at 10.35%
GBTC is an investment vehicle that is traded openly and is managed by Grayscale Investments, a division of Digital Currency Group.
The purpose of GBTC is to expose investors to Bitcoin without requiring them to purchase and retain the cryptocurrency themselves.
The fact that GBTC’s shares frequently trade at a premium or discount to the net asset value (NAV) of the Bitcoin it owns is one of its distinguishing features.
The dynamics of supply and demand in the market affect the premium or discount.
The price of GBTC shares may trade at a discount to the NAV in periods of low demand and at a premium in periods of high demand.
The excitement among investors over the possible US approval of a spot Bitcoin ETF has helped push holdings of Bitcoin funds to an all-time high, with inflows topping $1 billion this year.
The announcement last week of BlackRock’s intention to introduce an Ether-based ETF gave the market sentiment a further lift. BlackRock is a major player in the investment management industry.
Ether surpassed Bitcoin and reached a seven-month high as a result of the news.
Aside from the ETF frenzy, trading activity has increased to a six-month high on decentralised exchanges (DEXs).
Investors in cryptocurrencies are shifting their money to Ether in anticipation of possible approvals for ETFs.
The Arrival of Institutional Investors in Crypto
As previously mentioned, Binance has lost its position as the biggest Bitcoin (BTC) futures exchange to Chicago Mercantile Exchange (CME), a regulated derivatives market.
With this change, CME has taken the top rank for the first time in the past two years.
The steady rise of CME to the top spot this year highlights the increasing interest from institutional investors looking to trade the biggest and most well-known cryptocurrency.
Moreover, as investors focus on certain ETFs, the cryptocurrency market has been seeing massive inflows in recent weeks.
Digital asset investment products had $261 million in inflows last week, which is the sixth week in a row. The overall inflows of $767 million exceeded the $736 million recorded in 2022.
ETF Hype Persists: Grayscale Bitcoin Trust Discount at 10.35%,ETF Hype Persists: Grayscale Bitcoin Trust Discount at 10.35%,ETF Hype Persists: Grayscale Bitcoin Trust Discount at 10.35% , Bitcoin Crypto news, Bitcoin News