Shares of the Grayscale Bitcoin Trust (GBTC) have continued to slide, trading at a discount of 33.75% to the spot price of Bitcoin—a new all-time low since its inception in 2017.

GBTC is a financial vehicle that enables investors to trade shares in trusts that hold pools of Bitcoin, with each share meant to track the  current price of Bitcoin; the idea is that investors can gain exposure to Bitcoin without having to actually buy and hold the asset itself.

However, since February 2021, shares in GBTC have traded at a discount, meaning that GBTC trades for far less than the net value of the Bitcoin held by Grayscale to back the trust. Per Grayscale’s website, the value of the BTC held by the Trust is currently $13.3 billion.


Because GBTC has a six-month lockup period, holders are running at a loss, since they can only cash in by selling their GBTC shares.

GBTC discount/premium to NAV; source:
GBTC discount/premium to NAV. Source:

Grayscale’s spot Bitcoin ETF bid

Grayscale believes that the only way to correct GBTC’s ever-growing discount is to convert the trust into a spot Bitcoin ETF, arguing that it is “in the best interests of investors.” Converting the trust into an ETF would enable it to charge lower management fees, and make it easier to move money in and out of the fund.

However, although it has approved several Bitcoin futures ETFs, the U.S. Securities and Exchange Commission (SEC) has, to date, rejected every spot Bitcoin ETF application to cross its desk. The SEC has cited the potential for market manipulation among crypto traders as a key concern.

Grayscale first applied to launch a spot Bitcoin ETF in 2016, but withdrew it after a year. In October 2021, it formally applied to convert GBTC into a spot Bitcoin ETF, in a bid to “force the SEC’s hand,” according to a source cited by CNBC at the time. 


Since then, the SEC has repeatedly delayed its decision on Grayscale’s ETF proposal, with a July deadline for approval or rejection looming. The firm has responded by variously having its attorneys write to the SEC, threatening to take the SEC to court, arguing that a spot Bitcoin ETF will unlock $8 billion for investors, and launching a campaign encouraging people to write in to the SEC.

Grayscale has one voice of support within the SEC; commissioner Hester Peirce, a long-standing crypto advocate, has issued a statement against the commission’s silence on a spot Bitcoin ETF. “It is time for the Commission to stop categorically denying spot crypto exchange-traded products,” Peirce wrote. “Spot ETPs have launched in other countries without incident and with great investor interest”

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