As the discount shrinks between the price of Grayscale’s Bitcoin Trust (GBTC) and its Bitcoin holdings, traders who scooped up shares during what was perhaps the product’s darkest day are notching lucrative gains.

Shares of GBTC traded hands at $19.71 when markets opened Thursday, 137% higher than $8.29 on December 13 of last year. At the time, GBTC traded at a near 50% discount relative to its Bitcoin holdings, the most significant price discrepancy the trust has ever seen, according to Ycharts.

GBTC’s hefty gains since December 13 have outperformed Bitcoin itself. Since then, Bitcoin’s price has increased 48% to around $26,300 from $17,800.

Grayscale’s Bitcoin Trust, which has $17 billion in assets under management, allows investors to gain Bitcoin exposure in the form of security. Each share represents ownership of Bitcoin, currently 0.00090084 of a whole coin, which was worth $24.49 when the market’s opening bell rang.

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However, due to the product’s structure, shares have traded at a discount since February 2021. GBTC’s 692 million shares outstanding were collectively valued at $13.6 billion and $19.71 a piece, less than the trust’s net asset value (NAV) of $23.73.

As a closed-end fund, shares of GBTC can’t easily be redeemed for Bitcoin. This leads to deviations in GBTC’s price, as the number of existing shares can’t be adjusted to keep the product’s price in line with Bitcoin as it fluctuates due to supply and demand.

After the cryptocurrency exchange FTX collapsed last year and digital asset prices plunged, GBTC’s discount widened. At its worst, a share of GBTC represented $16.22 worth of Bitcoin while its going price was $8.29, according to Grayscale’s website.

If the Securities and Exchange Commission allows Grayscale to convert GBTC into a spot Bitcoin ETF, which the firm has sought for years, a redemption mechanism that comes with the ever-elusive green light would likely cause the discount to disappear.

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Grayscale took the SEC to court last June after the agency denied its application to convert GBTC into a Spot Bitcoin ETF. And following the firm’s courtroom victory earlier this week—forcing the SEC to reconsider—the discount has been cut to under 20%.

The discount momentarily slimmed earlier this year as judges overseeing the now-decided lawsuit heard arguments from Grayscale and the SEC. It shrank to 34% on March 8 from 46% a week before as the judges appeared to scrutinize the SEC.

A movement of similar size followed after BlackRock, one of the world’s largest asset managers, announced its gambit to establish a spot Bitcoin ETF. The discount had widened again to around 41% on June 15 but shrank back to 34% in the week after.

Ever since, the discount has continued to shrink. And as it stands, the odds of a spot Bitcoin ETF being approved this year are 75%, according to Bloomberg’s ETF experts Eric Balchunas and James Seyffart.

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