Hopes for BlackRock’s procurement of the inaugural U.S. Bitcoin spot ETF are driving institutional investment toward the Grayscale Bitcoin Trust (GBTC).

Bitcoin BTC, currently priced at $26,453, appears to have experienced a surge due to BlackRock’s plans, catalyzing an upswing in the original institutional BTC investment medium.

Recent information from the analytical platform CoinGlass reveals that on June 17, GBTC was on the brink of achieving fresh highs for 2023.

Lessening the GBTC “discount” to under -37%

The global mood surrounding the Bitcoin market experienced a slight uptick last week. This came on the heels of the revelation that BlackRock, the world’s premier asset manager, filed to initiate a Bitcoin spot price exchange-traded fund (ETF).

Though the U.S. currently does not permit this, a spot ETF from an established entity like BlackRock might potentially overcome these legal obstacles, according to some experts.

Meanwhile, hopeful signs extending beyond market sentiment are becoming more apparent. GBTC is trading at a substantial discount to the BTC spot, which is on an upward trajectory.

As per CoinGlass, this discount, or a negative “premium,” which describes GBTC share prices, stands at -36.6%.

Despite the notable discount, GBTC is trading closer to parity than nearly any other time this year. For instance, on June 13, the discount was nearing -44%.

Adam Cochran, a partner at Cinneamhain Ventures, shared his view on Twitter over the weekend. “If Blackrock’s ETF is approved, the real winner here is going to be $GBTC, because Blackrock will demonstrate the path to conversion, and GBTC’s 40%+ discount will resolve alongside industry growth,” he said.

Cochran expressed that he believes BlackRock’s offering stands a “good chance” of obtaining regulatory approval in the U.S.

“Blackrock is presenting a unique structure, very different from other attempts, by a titan who doesn’t back down. A ’30 act redeemable trust with redemptions (unlike GBTC) + a proposed rule change filing. They mean business,” he added.

ARK Yet to Join Latest Purchasers

The BlackRock move has already stirred up its share of debate, with market observers discussing whether it qualifies as an ETF at all.

While some believe it will be a Trust similar to GBTC, others like Cochran take a more refined stance.

Cory Klippsten, CEO of Bitcoin financial services firm Swan, stated, “IT’S OK TO CALL IT AN ETF GUYS. Securities Act of 1933 filing under Form S-1, NOT Form N-1A (like 99% of stock ETFs). It will trade on the exchange and be redeemable to the issuer. It’s a significant improvement over GBTC. Now we’ll wait and see if the SEC approves BlackRock’s spot Bitcoin ETF.”

Regardless, GBTC is witnessing increased investor interest. Among those enthusiastic buyers is the hedge fund North Rock Digital.

Following BlackRock’s move, North Rock Digital announced, “We have consistently accumulated more of the Grayscale trusts over the past few weeks. With the risk-reward ratio seeming massively skewed at current levels, we foresee a 50% upside if Grayscale wins, which we anticipate, and minimal downside if they lose. This filing could prompt them to adjust to more rational levels.”

On the other hand, ARK Invest, a significant GBTC share holder, has yet to increase exposure and continues to hold approximately 5.37 million GBTC shares.

Data from Cathie’s ARK — a specialized tracking website for ARK Invest CEO Cathie Wood — confirms a steady decline in these holdings throughout 2023.