As the Securities and Exchange Commission (SEC) reviews an application to convert the Grayscale bitcoin trust (GBTC) into a spot exchange-traded fund (ETF), the discount between the product and its underlying asset value is reducing.
For the majority of this year, the price of GBTC, one of the most prominent goods in the cryptocurrency industry, has been drifting closer to its net asset value (NAV). However, the discount appeared to be closing faster as the SEC launched closed-door meetings to assess Grayscale’s application for conversion to a spot bitcoin ETF, which might have a direct impact on the bitcoin price.
“The SEC has a closed-door meeting, and many are speculating that one of the topics they will be talking about is Grayscale and whether they should allow Grayscale to convert their trust into a bitcoin spot ETF,” TheStreetCrypto’s George Tung stated in the video above. “So, this may happen, and it could be announced… Watch out if we receive any serious news on a spot bitcoin ETF approval. We might be on our way to (a bitcoin price of) $40,000 or $50,000.”
The SEC said earlier this month that it will not appeal a court verdict that found it in error for first rejecting Grayscale’s proposal to create a spot bitcoin ETF. As a consequence, the commission will reconsider the application, as well as those of many other companies that have registered to market comparable items.
The SEC must either accept these petitions or show compelling reasons for more denials sooner or later.
“They have to do something about Grayscale,” he remarked. “They can’t appeal, and the SEC can’t appeal, so something has to be done.” You can’t just leave them dangling indefinitely. I believe they just have around 30 days to answer. So it’ll either get allowed or not.”
With the SEC entering confidential conversations to assess Grayscale’s application, investors appear to be hopeful about a quick clearance, and the value of GBTC is growing in relation to its underlying bitcoin. Its discount is now 13.35%, up from 17.13% on October 27, 2023. Since 2021, GBTC has not given a premium.
Tung presented the SEC meetings as another encouraging indication for the crypto market’s immediate future, amid other indicators such as a string of significant USDT transactions to top cryptocurrency exchange Binance.
Please note that this article does not offer any instructions or suggestions regarding investment decisions. It is important for you to conduct your own research or seek professional advice from a qualified professional before conducting an investment decision.