Bitcoin (BTC) BlackRock’s plans seem to have sparked a rally in the institutional investment vehicle BTC “OG”.
Data from a monitoring source CoinGlass shows that on June 17, Greyscale Bitcoin Trust (GBTC) almost reached new highs of 2023.
GBTC “premium” heads below -37%
Sentiment in the bitcoin market improved slightly late last week when news emerged that the world’s largest asset manager, BlackRock, filed to run Bitcoin exchange-traded fund with a spot price (ETF).
While still not allowed in the United States, spot ETFs from a dedicated entity like BlackRock should have a better chance of breaking the legal impasse, some say.
Meanwhile, signs of optimism beyond sentiment are clearer — GBTC, long trading for big discount on BTC spotis on the way up.
According to CoinGlass, this discount or negative “premium” used to characterize GBTC share prices is currently at -36.6%.
While GBTC is still heavily discounted, it is trading closer to zero than at almost any time this year. For example, on June 13, the discount was closer to -44%.
“If the Blackrock ETF is approved, the real winner here will be $GBTC,” Adam Cochran, partner at venture capital firm Cinneamhain Ventures, he wrote in the comments section of Twitter over the weekend.
“Because Blackrock will show the way to convert and GBTC discount 40%+ will be solved based on the growth of the industry.”
Cochran went on to say that he thinks BlackRock’s offer has a “good chance” of getting US regulatory approval.
“A very different structure than the other efforts of the undefeated monster. ’30 deal with a disbursable trust with a disbursement (as opposed to the GTC) + filing a proposed rule change. They came to play,” he said he added.
ARK has not yet joined the newest buyers
BlackRock’s move is already shrouded in controversy of its own, as market commentators debate whether it is actually an ETF at all.
Related: Why is the crypto market up today?
Some argue that it will simply be a similar Trust to GBTC, while others, including Cochrane, take a more nuanced view.
On the ETF vs Trust Debate – Lots of ETFs have alternative structures.
This is an ETF like a redeemable trust, not like GBTC.
The Trust component is basically what we give them a list of stocks that represent X amount of BTC because it doesn’t process the BTC units directly on the clearinghouse.
— Adam Cochran (adamscochran.eth) (@adamscochran) June 16, 2023
“IT CAN BE CALLED ETF GUYS,” Cory Klippsten, CEO of bitcoin financial services firm Swan. in summary.
“Securities Act of 1933, filing on Form S-1, NOT on Form N-1A (like 99% of stock ETFs). It will be traded on an exchange and payable to the issuer. MUCH better than GBTC. We will now wait to see if the SEC approves Blackrock’s Spot Bitcoin ETF.”
Furthermore, investor interest in GBTC is growing as a result. Hedge fund North Rock Digital is among the eager buyers.
“Over the past few weeks, we have consistently collected more grayscale trusts,” it said he announced post-BlackRock.
“RR appears to be heavily skewed at current levels.” 50% plus if Greyscale wins, which we expect, and a minimal minus if they lose. This filing could be the catalyst to bring them to more rational levels.”
One major holder that has not increased exposure in the meantime is ARK Invest, which continues to hold approximately 5.37 million shares of GBTC.
Data from Cathie’s ARKa dedicated tracking site for ARK’s CEO, Cathie Wood, confirms that these shares are gradually declining until 2023.
This article does not contain investment advice or recommendations. Every investment and trading step involves risk and readers should do their own research when making decisions.