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The Gap Between Bitcoin Price and GBTC Shares Narrows After SEC Rejects Request for ETF Conversion

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The Gap Between Bitcoin Price and GBTC Shares Narrows After SEC Rejection

The price gap between Bitcoin and GBTC shares has decreased following the Securities and Exchange Commission (SEC) rejecting Grayscale’s request to convert its trust into an exchange-traded fund (ETF).

Investors Cash in on the Hope of SEC Approval for Bitcoin-Linked Product

Many investors took advantage of the expectation that the SEC would approve a product directly tied to the value of Bitcoin last year.

GBTC Shares Discount to Bitcoin Value Falls to 17%

The US Court of Appeals instructed the SEC to reevaluate its refusal to approve Grayscale Bitcoin Trust (GBTC)’s transformation into an ETF. As a result, the discount on GBTC shares compared to the underlying bitcoin value has dropped to around 17%.

GBTC Offers Exposure to Bitcoin Through Security

GBTC manages $16.1 billion in assets and provides investors with exposure to Bitcoin as a security. Each share represents ownership of a fraction of a bitcoin, equivalent to 0.00090040 of the full currency.

GBTC Shares More Than Double in Value

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Analysts attribute the increase in the value of GBTC shares to Bitcoin’s small rally this year and the diminishing discount.

Potential Hurdles in Switching from GBTC to ETF

The SEC has a limited time to respond to the court’s decision, and the possibility of the agency appealing adds uncertainty to the process.

SEC Delays Decision on Spot Bitcoin ETF Applications

The SEC has postponed its decision on several spot Bitcoin ETF applications until mid-October. It may approve some while asking Grayscale to align its application with the approved ones.

Grayscale Asserts Validity of Existing Futures Market Monitoring

In a letter to the SEC, Grayscale argues that the existing futures market monitoring for Bitcoin futures ETFs provided by CME Group is sufficient, emphasizing the high correlation between the spot Bitcoin market and Bitcoin futures.

Timing of Actions Crucial for Investors

Market watchers highlight the importance of timing for investors, as the closing of the discount gap can lead to sudden price spikes. Alternatively, the gap may gradually narrow over time, depending on the progress of the process and fluctuations in the price of Bitcoin.

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