GBTC Discount Go Bad: Grayscale’s Court Case Negatively Affects Discount
The Grayscale’s court case has been among the most tending within the week. The surprise court victory for Grayscale caused the Grayscale Bitcoin Trust (GBTC) discount to collapse on Wednesday. The discount, which had been a substantial source of worry for investors, was drastically reduced, which led to a rise in the price of GBTC shares.
According to reports from multiple sources, the oral arguments Grayscale made in federal court on Tuesday allowed the plaintiff to turn the tables in the legal battle and caused the fall in discount. The judges at the hearing appeared to support Grayscale; one questioned if an ETF would bridge the gap between the value of GBTC shares and the underlying Bitcoin.
The market had reportedly been keenly following the legal dispute between Grayscale and the Securities and Exchange Commission (SEC). Grayscale’s request for a Bitcoin ETF has previously been denied by the SEC; according to some trusted sources, they doubt the performance in the presence of market manipulation and investor safety. Reports say that Grayscale had tried explaining to the public that the SEC’s concerns were unjustified because its GBTC shares were already subject to stringent regulatory scrutiny.
Reason for the Collapse
It was gathered that the discount has collapsed due to the surprise court victory for Grayscale, which has increased demand for GBTC shares. Investors had been very concerned about the discount since it had grown considerably in recent months, making it challenging to evaluate GBTC shares appropriately.
Meanwhile, observers warn that there are still concerns about the judge’s case handling. They also proceeded to speculate that the SEC might reject Grayscale’s application again but for a different reason this time. But judging from the look of things, there is still hope the judges’ ruling might still be appealed.
According to analysis, the reduction in discount is a good thing for GBTC investors because it raises the value of the company’s shares to that of the underlying Bitcoin. The outcome of the legal dispute between Grayscale and the SEC is still up in the air, but judging by how the market reacted to Grayscale’s surprising court victory, investors appear to be upbeat about the future of GBTC.
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