The Bitcoin (BTC) trust controlled by digital asset management titan Grayscale is flashing signs of life following BlackRock’s latest filing for an exchange-traded fund (ETF) designed to track the performance of the crypto king.
The Grayscale Bitcoin Trust (GBTC) surged more than 12% on Friday, a day after $10 trillion investment firm BlackRock sent a spot Bitcoin ETF application to the U.S. Securities and Exchange Commission (SEC).
Grayscale’s GBTC has been trading at a steep discount to its net asset value (NAV), but the latest rally has allowed the Bitcoin trust to close the gap from 44.03% on June 13th to 36.61% on June 16th.
Adam Cochran, a partner at the family office Cinneamhain Ventures, believes that GBTC will be a big winner if the SEC approves BlackRock’s application.
“If the Blackrock ETF does get approved, the real winner here is going to be GBTC
Because Blackrock will show the path to conversion, and GBTC’s [30%+] discount will resolve on top of industry growth.”
Earlier this year, Grayscale CEO Michael Sonnenshein highlighted the importance of converting GBTC into a spot Bitcoin ETF. According to Sonnenshein, the conversion of GBTC will allow the trust to trade near par with the Bitcoin spot price, adding billions of dollars to investors’ positions as the discount evaporates.
“Because GBTC is trading at a discount to its NAV today, if it were to convert to an ETF, there would no longer be a discount, there would no longer be a premium. There’d be that arbitrage mechanism embedded…
What does that mean? That means there’s actually a couple billion dollars of capital that would immediately go right back into investors’ pockets on an overnight basis, because the fund, instead of trading at a discount, would bleed back up to its net asset value.”
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