GBTC Discount Narrows to Lowest Level Since November Following Court Hearing

The three-judge panel appeared skeptical of the SEC’s reasoning for denying conversion of the trust to an ETF.

AccessTimeIconMar 7, 2023 at 8:05 p.m. UTC
Updated Mar 7, 2023 at 8:24 p.m. UTC

The Grayscale Bitcoin Trust (GBTC) discount to net asset value (NAV) has narrowed to below 35%, its lowest point since Nov. 7, according to data from TradingView, following what seemed a favorable court hearing on Tuesday for the company.

The discount narrowed to 35% following the hearing where a panel of appeals court judges appeared skeptical about the U.S. Securities and Exchange Commission's (SEC) arguments in rejecting Grayscale’s bid to convert its GBTC into an exchange-traded fund (ETF).

The judges questioned the SEC's logic in distinguishing between bitcoin spot market prices and futures market prices.. Grayscale’s argument is the SEC acted arbitrarily in rejecting the ETF application and previously approving bitcoin futures ETFs.

The GBTC discount began to narrow last week ahead of the hearing, after widening to almost 50% in early December.

Crypto-focused hedge fund North Arrow Digital, tweeted that it remains long on GBTC following the court case. “The discounts represent very strong [risk/reward] investments given multiple potential avenues to value realization. Think it's likely SEC loses their court case,” it said.

“We have consulted many experts and feel ETF approval this year is a real possibility. Furthermore, even if they don't approve it, our feeling is the moment [SEC Chair Gary] Gensler is gone an ETF becomes quite likely.”

Grayscale is a subsidiary of Digital Currency Group, CoinDesk's parent company.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Lyllah Ledesma

Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds bitcoin, ether and small amounts of other crypto assets.