The trading volume in the Grayscale Bitcoin Trust (GBTC), the largest bitcoin fund in the world, is currently at its highest level of 2023. The rise in popularity of GBTC is most likely due to the ETF application from BlackRock, among others, and a decline in the so-called discount that was on GBTC.
Which discount?
By discount, we mean GBTC’s shares are trading below the market value of the bitcoin in the fund. At the time of writing, GBTC manages more than 600,000 bitcoin, which can be purchased through the fund’s shares at a “discount” of approximately 25 percent.
The problem is that with GBTC you have to pay a decent management fee and the shares in the fund cannot be converted into actual bitcoin. In that respect, you are buying a weakened form of bitcoin.
For that reason, GBTC may also trade at a discount or even at a premium. There was also a period in the early stages where GBTC was trading at a 20-40 percent premium to the actual price. However, that has not been the case for some time now.
Argument for Spot Bitcoin ETF
That also forms a solid argument for the introduction of a Spot Bitcoin ETF in the United States. Now, GBTC is basically the only fund that allows investors to easily invest in bitcoin. Were it not for the fact that they still do not have access to a product that follows the actual bitcoin price.
Michael Saylor’s MicroStrategy also acts as a share with which you can invest indirectly in bitcoin. However, it would be better for the market to have an actual Spot Bitcoin ETF.
After all, the price would then also be in line with that of bitcoin and in that respect a Spot Bitcoin ETF would offer investors more protection than the current options.
In any case, the daily volume in GBTC has risen considerably in recent weeks. Possibly due to the hope that GBTC can also be converted into a Spot Bitcoin ETF in the long term, after which the value of the shares would once again be in line with the bitcoin price.