Grayscale Bitcoin Trust Shares Rally to a One-Year High, Discount Dips to 30%

Grayscale Bitcoin Trust’s (GBTC) share price surged to a one-year high on Tuesday as a report about investment asset manager Fidelity Investments preparing to follow BlackRock’s application for a spot bitcoin (BTC) exchange-traded fund (ETF) with its own, renewed optimism about converting the trust into an ETF.

GBTC closed at $19.47 Tuesday afternoon, gaining 7.1% through the day. This was the highest closing price since last June, according to TradingView data. Meanwhile, BTC traded mostly flat, except for a brief spike to $31,000 following the Fidelity news.

The discount on the GBTC’s share price relative to its net asset value – a widely followed metric in the digital asset space – dropped to 30%, according to a CoinDesk calculation. The last time the GBTC closed the day around this level was last September, according to historic data by Ycharts.

Tuesday’s price surge extended GBTC’s recent rally, which was spurred initially by BlackRock’s filing on June 15, and continued as financial services giants Invesco and WisdomTree reapplied to offer spot BTC ETFs. GBTC has gained nearly 50% in less than two weeks since BlackRock’s application. BlackRock is the world's largest asset manager with $9.1 trillion in AUM.

Investors are betting on GBTC because of the “BlackRock filing and optimism that [the firm] may have cracked the code on an ETF, giving hope that Grayscale could also convert and remove the discount,” Doug Schwenk, CEO of crypto data provider Digital Asset Research, said in a note to CoinDesk.

Traders are also increasingly optimistic about the outcome of a lawsuit between Grayscale and the U.S. Securities and Exchange Commission (SEC), Schwenk said. The firm sued the agency earlier this year for denying its application to convert the closed-end GBTC fund into an ETF that would allow redemptions and close the gap between the share price trading on secondary markets and the net value per share of the fund’s BTC holdings.

“A positive outcome for Grayscale would lead to greater potential for listing as an ETF and removing the discount,” he added. “Of course, some believe that BlackRock's filing is also a view on the potential for Grayscale to have success in their lawsuit.”