Institutions may be accumulating GBTC in anticipation of the SEC’s approval to the BlackRock spot bitcoin ETF.

The Grayscale Bitcoin Trust (GBTC) is approaching its highest levels of 2023 following news of BlackRock’s filing for a Bitcoin spot price exchange-traded fund (ETF). This development has generated institutional buying interest in the Grayscale Bitcoin Trust (GBTC), with hopes that BlackRock will secure the first U.S. Bitcoin spot ETF.

GBTC has been trading at a significant discount to BTC spot prices but is now trading closer to zero than at any time this year. Market observers believe that if BlackRock’s ETF is approved, GBTC will benefit greatly, as the path to conversion will be demonstrated and the discount will resolve. (CoinTelegraph)

However, there is debate as to whether BlackRock’s product is truly an ETF. Despite this, investor interest in GBTC is increasing, and hedge fund North Rock Digital has been accumulating more shares. ARK Invest, on the other hand, has not increased its exposure to GBTC and continues to hold around 5.37 million shares.

There is rising optimism surrounding the approval of BlackRock’s offering, given its different structure and proposed rule change filing. It may have a higher chance of approval from the U.S. Securities and Exchange Commission (SEC) due to the inclusion of a “surveillance-sharing agreement.”

The agreement, outlined in the filing, involves Nasdaq collaborating with a spot trading platform for Bitcoin to mitigate market manipulation risks. This agreement is seen as a distinguishing factor in BlackRock’s application, addressing the SEC’s concerns about market manipulation.

While some argue that such an agreement is unnecessary given the public data feeds of major exchanges, the SEC has previously emphasized the importance of surveillance-sharing agreements.

BlackRock’s filing for a spot Bitcoin ETF follows previous rejections of ETF proposals from other companies such as VanEck and WisdomTree, as well as Grayscale’s application for converting GBTC to a spot bitcoin ETF.

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