BlackRock ETF Filing Boosts Grayscale Bitcoin Trust Close to 2023 Peaks as Demand Surges

Institutional Demand for GBTC Grows Amid Hope for BlackRock’s Bitcoin Spot ETF
BlackRock’s recent plans to launch a Bitcoin spot price exchange-traded fund (ETF) have ignited a rally in the Grayscale Bitcoin Trust (GBTC), the pioneering institutional Bitcoin investment vehicle.

Monitoring data from CoinGlass reveals that on June 17, GBTC reached nearly its highest point of 2023, driven by increased buying interest from institutional investors.

As the sentiment in the Bitcoin market showed signs of improvement, GBTC’s trading premium over BTC spot prices plummeted to around -37%. This discount, though still significant, is closer to zero than it has been throughout most of the year. In fact, the discount was as high as -44% just a few days prior, emphasizing the impact of BlackRock’s potential ETF approval.

Adam Cochran, a partner at Cinneamhain Ventures, highlighted the positive implications for GBTC if BlackRock’s ETF receives regulatory approval, as it could pave the way for the conversion of GBTC shares and potentially eliminate the discount. Cochran expressed optimism about the chances of BlackRock’s offering obtaining regulatory approval, citing its unique structure and the firm’s reputation.

It should be noted, however, that BlackRock’s ETF proposal has generated some debate, with differing opinions on whether it qualifies as an ETF or simply a similar trust to GBTC. Despite this, investor interest in GBTC has been on the rise. Hedge fund North Rock Digital, for instance, has been consistently accumulating GBTC shares, expecting significant upside potential if Grayscale wins its battle and only minimal downside risk if it doesn’t.

One notable exception among major holders is ARK Invest, which has yet to increase its exposure to GBTC, maintaining a steady 5.37 million shares. Data from Cathie’s ARK, a tracking website for ARK Invest CEO Cathie Wood, confirms this gradual decline in GBTC holdings throughout 2023.