GBTC discount falls to 18-month low as Grayscale lags behind ETF fee race

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The discount of the Grayscale Bitcoin Trust (GBTC), the world’s largest Bitcoin fund, has fallen to its lowest level since April 2021 and is expected to be converted into a spot Bitcoin exchange-traded fund (ETF).

data programme The discount fell to 5.6% on Monday, similar to June 2021 levels. The fund has been trading at a discount since February 2021 – reaching a high of nearly 50% in December 2022 – but expectations of ETF approval and growing BTC sentiment have gradually narrowed the discount level.

Source: YCharts

GBTC closed at $39, ranking second. As of Tuesday, each GBTC share held $41.86 in Bitcoin. The trust has no built-in market mechanism to keep GBTC shares trading close to Bitcoin’s underlying value – opening up discounts and spreads that traders can use in their trading strategies.

As of Tuesday, GBTC was one of the only ways for U.S. stock traders to see where Bitcoin’s price is headed without buying the actual cryptocurrency.

A discount can be considered a pessimistic indicator as it indicates traders are no longer interested in BTC, while a premium indicates increased demand.

Grayscale, meanwhile, is currently awaiting a decision from the U.S. Securities and Exchange Commission (SEC) on listing the trust and 12 other companies as ETFs.

Grayscale has lowered its 2% management fee to 1.5% as part of its plan to upgrade to a spot Bitcoin ETF, according to Grayscale. document S3 updated Monday that the firm now has more than $27 billion in assets under management.