Investors are betting on Grayscale Bitcoin Trust’s (GBTC) share price, which surged to a one-year high on Tuesday, as a report about investment asset manager Fidelity Investments preparing to follow BlackRock’s application for a spot bitcoin (BTC) exchange-traded fund (ETF) with its own, renewed optimism about converting the trust into an ETF.
GBTC closed at $19.47 Tuesday afternoon, gaining 7.1% through the day. This was the highest closing price since last June, according to TradingView data, said Doug Schwenk, CEO of crypto data provider Digital Asset Research.
The discount on the GBTC’s share price relative to its net asset value dropped to 30%, according to a CoinDesk calculation. The last time the GBTC closed the day around this level was last September, according to historic data by Ycharts.
The recent rally was spurred initially by BlackRock’s filing on June 15, and continued as financial services giants Invesco and WisdomTree reapplied to offer spot BTC ETFs. GBTC has gained nearly 50% in less than two weeks since BlackRock’s application.
Schwenk said traders are also increasingly optimistic about the outcome of a lawsuit between Grayscale and the U.S. Securities and Exchange Commission (SEC). The firm sued the agency earlier this year for denying its application to convert the closed-end GBTC fund into an ETF that would allow redemptions and close the gap between the share price trading on secondary markets and the net value per share of the fund’s BTC holdings.
A positive outcome for Grayscale would lead to greater potential for listing as an ETF and removing the discount, he added. Of course, some believe that BlackRock’s filing is also a view on the potential for Grayscale to have success in their lawsuit.