First Mover Americas: Grayscale’s GBTC Discount Narrows to 10%

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Grayscale’s Bitcoin Trust's (GBTC) discount to its net asset value (NAV) has narrowed to levels not seen since July 2021, data from YCharts shows. The discount to NAV, currently around 10.35%, has been shrinking from a record of almost 50% during the depths of the FTX-induced crypto winter in December last year. Last week, CoinDesk reported that the U.S. Securities and Exchange Commission (SEC) initiated discussions with Grayscale Investments about converting the trust to a spot bitcoin ETF, which, if successful, would provide significant market momentum and liquidity. Bitcoin fund holdings have reached an all-time high, driven by investor enthusiasm over the anticipated approval of a spot bitcoin ETF in the U.S., with total inflows exceeding $1 billion this year, CoinDesk recently reported. Grayscale Investments and CoinDesk are both owned by Digital Currency Group.

Bankrupt crypto lender Genesis has agreed to settle $1 billion in claims by defunct crypto hedge fund Three Arrows Capital (3AC) with a payment of $33 million, court documents show. The hedge fund's collapse in June 2022 marked the first storm in a long crypto winter, and its claims against Genesis refer to transfers made prior to the lender's own bankruptcy in January. The deal, set out in a filing from Nov. 9, follows "extensive negotiations," between the parties, and Genesis is seeking a New York bankruptcy court's go-ahead to settle the claims. "The 3AC Debtor shall receive an allowed general unsecured claim against Genesis in the amount of $33,000,000 in full and complete satisfaction of the more than $1 billion dollars in claims asserted against each of the Genesis Debtors," the document said, adding that the agreement will "mutually release each other from liability."

Excitement about the potential approval of spot bitcoin exchange-traded-funds (ETF) has fueled a strong rally in digital assets over the past month, but the move higher seems overdone, JPMorgan (JPM) said in a research report last week. Bullish sentiment has been buoyed by two main arguments, the bank said. “A spot bitcoin ETF approval would help crypto markets to attract fresh/new capital as the newly-approved ETFs see inflows,” and the “approval would cement a win for the crypto industry and a setback for the Securities and Exchange Commission (SEC) thus making it more likely that going forward the SEC approach towards the crypto industry will soften,” analysts led by Nikolaos Panigirtzoglou wrote.