Investors in Profits as Grayscale Bitcoin Trust’s Discount Narrows Amidst Price Surge
Fri, September 1, 2023 at 10:11 AM GMT+5:30
Gains On Stocks Of Grayscale’s Bitcoin Trust (GBTC) Are On The Rise
Investors who acquired shares of Grayscale’s Bitcoin Trust (GBTC) during its period of significant discount are now witnessing substantial gains. As the gap between the price of GBTC and its Bitcoin holdings diminishes, those who purchased shares during its darkest days are reaping the rewards.
GBTC shares were trading at $19.71 when the markets opened on Thursday, up 137% from $8.29 on December 13 of the previous year. At that time, the price of GBTC was almost 50% lower than the value of the Bitcoins it held, which was the biggest price difference the trust had ever encountered.
The gains of GBTC since December 13 have surpassed Bitcoin’s performance, with the cryptocurrency’s price rising by 45% from $17,800 to approximately $26,000. Coinbase shares have also risen following the court win by Grayscale.
Grayscale’s Bitcoin Trust, managing $17 billion in assets, offers investors exposure to Bitcoin through a security form. Each share signifies ownership of a portion of Bitcoin, equivalent to 0.00090084 of a whole coin, valued at $24.49 during the market’s opening.
GBTC’s discount expanded after the demise of cryptocurrency exchange FTX last year, but it has since shrunk to around 20% as a result of spot Bitcoin ETF applications by major institutional players and Grayscale’s recent legal victory over the SEC. The steady decline in the discount is consistent with experts’ forecasts that a spot Bitcoin ETF has a 75% probability of being approved this year, as reported by Bloomberg’s ETF analysts.