GBTC shares trading at a lower implied value to BTC price may soon be a thing of the past, a new prediction says.
Bitcoin (BTC) investment vehicle, the Grayscale Bitcoin Trust (GBTC) could erase its BTC price “discount” in 2024.
GBTC price: From “elevator to hell” to “stairway to heaven?”
Grayscale netting a court victory over United States regulators on Aug. 29 provided an instant remedy to what was flagging GBTC performance.
The fund, which contains over 600,000 BTC, has traded at a discount to the Bitcoin spot price, also called net asset value (NAV), since February 2021.
What was once the “GBTC premium” has thus been negative for over two-and-a-half years, but that could soon change.
News that the U.S. Securities and Exchange Commission (SEC) must consider GBTC’s conversion to a Bitcoin spot price exchange-traded fund (ETF) on the same terms as other applicants sent the “discount” to its lowest levels since December 2021.
At just -17%, it is now less than half of what it was at the peak, when it neared 50% in what was once called an “elevator to hell.”
“Expect Grayscale $GBTC premium to close the discount next year,” CoinGlass wrote in part of subsequent commentary.
Noting the size of its assets under management (AUM), Dylan LeClair, senior analyst at digital asset fund UTXO Management, reflected on the impact that GBTC had in shaping Bitcoin’s run to current all-time highs.
“Don’t forget how large $GBTC is. They hold >600k BTC, and was the single largest driver of the 2021 bull run from a flows standpoint,” he told X subscribers on Aug. 29.
“Today’s discount move from -26% to -17% is the equivalent of 56,000 BTC returning to the AUM of $GBTC if shares are marked to market.”
BTC price dices with crucial support reclaim
Eyeing the implications of the Grayscale news for BTC price action, meanwhile, market participants flagged the potential return of some key moving averages (MAs).
— Philip Swift (@PositiveCrypto) August 30, 2023
Chief among these are the 200-week and 200-day trend lines, both of which failed to act as support during Bitcoin’s descent to multi-month lows earlier in August.
Continuing on the topic, popular trader and analyst Rekt Capital reiterated that several MAs remained an essential reclaim target for bulls.
In an X post, he referenced the potential bullish invalidation of Bitcoin’s double top structure on weekly timeframes.
“This is great initial momentum from ~$26K support which never brokedown to fully confirm the Double Top,” part of his analysis read.
“That said, $BTC needs to reclaim the Bull Market moving averages as support to be in the clear.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.