• Grayscale’s Bitcoin Investment Fund (GBTC) trading volume has surged from around $16.1 million to nearly $80 million following BlackRock’s Spot Bitcoin ETF application.
• GBTC’s share price has increased by over 24% since last week, with the discount between GBTC and BTC narrowing to 33%.
• BlackRock’s ETF application may indicate that some Wall Street entities are subtly endorsing the crypto industry and bitcoin ETFs.
Increase in GBTC Trading Volume
Grayscale’s Bitcoin Investment Fund (GBTC) trading volume has experienced an almost four-fold increase, from around $16.1 million on June 14 to nearly $80 million five days later. This impressive growth can be traced back to BlackRock’s recent submission for a Spot Bitcoin ETF.
Impact on GBTC Share Price
This move has had a noticeable impact on GBTC’s share price, as it climbed over $16 for the first time since May 10. In comparison to the previous week, it has seen an increase of more than 24% and currently sits at approximately $15.9. The discount between GBTC and BTC has also seen a considerable reduction, falling to as low as 33%, which is the lowest since September 2022 and lower than the 34% figure recorded at the beginning of March this year.
No Redemption Mechanism Offered
Grayscale currently does not offer a redemption mechanism for GBTC, but such a feature would be included in an ETF if converted into one. If this were to happen, traders would have the opportunity to capture additional gains if Bitcoin’s price increases, especially if bought at a discount now.
BlackRock’s ETF Application
BlackRock’s application suggests that some major Wall Street entities might be supporting cryptocurrency and bitcoin ETFs indirectly. However, there is still uncertainty surrounding this outcome as the SEC could take action against existing bitcoin futures ETFs instead of allowing them to continue operating without any restrictions or regulations in place.
In conclusion, Grayscale’s Bitcoin Investment Fund (GBTC) trading volume has significantly increased following BlackRock’s Spot Bitcoin ETF application, resulting in its share price increasing by over 24%. Although Grayscale does not offer a redemption mechanism for GBTC yet, if it were converted into an ETF then traders would have better opportunities when it comes to capturing additional gains from increasing prices of cryptocurrencies like Bitcoin. Despite BlackRock’s positive outlook towards cryptocurrency and bitcoinETFs through their application submission this year, there is still some uncertainty about what action will be taken by regulatory bodies like SEC regarding these products in future times ahead