Grayscale Bitcoin Trust (GBTC) attained a record-high discount of 36.7%. Hence, reflecting a reduced institutional want for the leading digital asset. BTC continues to toil to break the $20k resistance region. 

GBTC Soars To An All-time Discount High 

Trading at a 36.7% discount versus spot prices marked the fund’s most considerable value over time. It signaled investors are jumping ship to other preferred forms of Bitcoin investments. The most likely selection would be exchange-traded funds(ETFs). 

According to Arcane Research, there are intense debates over investing in GBTC. For discounts to be this high infers, big-time players like Wall Street are ignoring Bitcoin. If not, they are hesitant to make a move on it. 

Additionally, the higher the bias gets, the thinner GBTC’s discount may become. Hence, GBTC may take up the demand for Bitcoin, which would subsequently strain positive momentum. 

It is worth noting that GBTC is Bitcoin’s largest trust. It controls 635,240 Bitcoins, an equivalent of $12 billion. That currently amounts to 3.3 percent of its flowing supply. 

Bitcoin started trading at a 20% positive premium level in 2015. Then in 2021, it turned to a negative premium. Throughout the time, the average discount was 19%. 

It created a discount gap following the establishment of the Purpose Bitcoin ETF on the Toronto Stock Exchange (TSE). TSE launched in February last year. 

Meanwhile, the Security and Exchange Commission (SEC) has constantly opposed an ETF spot. Recently, the agency brushed off WisdomTree’s request for one. Due to this, Bitcoin whales trooped to other Bitcoin-affiliated trusts. 

SEC Rejects Request For GBTC Spot ETF

In June, Grayscale applied for a GBTC spot Bitcoin ETF, which SEC rebuffed. Thus pushing GBTC to term the decision “arbitrary, capricious, and discriminatory.” Consequently, Grayscale filed a lawsuit against the Security and Exchange Commission. 

The suit, filed on June 29, requested the Columbian court to evaluate the agency’s decision. The security institution had released its decision the previous day. 

Grayscale is an offshoot of Digital Currency Group, the founder of Coindesk. However, the firm isn’t the only entity SEC declined its ETF application. The agency has refused several similar applications from leading entities in the crypto industry. 

Some of these institutions include Ark21Shares and WisdomTree. According to the commission, the move excluded investors’ security while creating opportunities for scams and manipulation. WisdomTree’s recent petition got declined the same day Grayscale put in for case review. 

Although the institution has constantly rebuffed applications for spot ETF, it has assented to futures ETF. Thus, setting the stage for Grayscale’s attorney to deem SEC’s decision not within its authority. Further, the legal eagle claimed in the brief that BTC spot and futures ETF draw on their prices considering lapping pointers. 

Therefore, they attract corresponding pitfalls making the agency’s decision contemptible. Craig Salm, Grayscale’s lawyer, further asserted that regulatory acts should not allow partiality. SEC will reply to Grayscale on November 9. 

No Comments.