The "discount" on the Bitcoin (BTC) price that the investment vehicle known as the Grayscale Bitcoin Trust (GBTC) now carries may be eliminated in the year 2024.
The immediate improvement in GBTC performance that resulted from Grayscale's court victory over United States regulators on August 29 was a direct response to the company's declining performance.
Since February 2021, the fund has traded at a discount to the Bitcoin spot price, often referred to as its net asset value. The fund has more than 600,000 BTC in its holdings.
What was initially referred to as the "GBTC premium" has remained negative for over two and a half years; however, this situation may soon shift.
The "discount" reached its lowest levels since December 2021 after the news that the United States Securities and Exchange Commission must assess GBTC's conversion to a Bitcoin spot price exchange-traded fund on the same terms as other applicants.
It is presently less than half of what it was at its peak when it was nearing 50% in what was once referred to as an "elevator to hell." The current rate of -17% is less than half of the peak rate.
"Expect Grayscale $GBTC premium to close the discount next year," CoinGlass said as part of his discussion.
Dylan LeClair, senior analyst at digital asset fund UTXO Management, pondered on GBTC's role in shaping Bitcoin's ascent to current all-time highs while noting the amount of its assets under management.
"Don't lose sight of how much money $GBTC represents. They have more than 600,000 BTC, and from a flows perspective, they were the single largest driver of the bull run in 2021," he told X subscribers on August 29.
If the shares are marked to market, "Today's discount move from -26% to -17% is the equivalent of 56,000 BTC returning to the AUM of $GBTC."
BTC PRICE DROP WITH RECLAIM OF CRUCIAL SUPPORT
In the meantime, market participants are keeping an eye on the implications of the Grayscale news for the price action of BTC, and some have pointed out the likely reappearance of some major moving averages (MAs).
The 200-week and the 200-day trend lines are the most important of these, and both failed to act as support during Bitcoin's plummet to multimonth lows earlier in August. Both of these trend lines are shown in bold.
Despite this, Cointelegraph Markets Pro and TradingView data showed that BTC/USD had trouble holding either level. This was the case even though the prior daily candle closed above both.
Continuing the discussion, the well-known trader and analyst Rekt Capital once stated that many moving averages (MAs) remained a crucial recapture objective for bulls.
In a post on X, he referenced the possible bullish invalidation of the double-top structure that Bitcoin has been displaying on weekly timescales.
A portion of his analysis ran as follows: "This is great initial momentum from $26K support, which never broke down to fully confirm the Double Top."
In light of this, "That being said, $BTC needs to reclaim the Bull Market moving averages as support to be clear."