There’s a new player in the crypto ETF market – Fidelity Investments! On Tuesday, Grayscale Bitcoin Trust‘s (GBTC) share price surged to a one-year high as reports emerged that the investment asset manager was readying its own exchange-traded fund (ETF). This, along with optimism around the trust’s potential conversion into an ETF, sparked a GBTC price surge and marked the latest entry of a major institution into the crypto space.

GBTC Shares Surge: 7.1% Gain and Lowest NAV Discount Since September

The price of GBTC shares reached over $19.47 Tuesday afternoon, reflecting a 7.1% gain for the day, while bitcoin (BTC) traded mostly flat, except for a brief spike to $31,000 following the Fidelity news.

The GBTC discount relative to its NAV reached its lowest level since last September, as calculated by CoinDesk. The narrowing of this metric reflects shifting investor optimism and the buzz around BlackRock‘s ETF filing, driving the recent rally. Invesco and WisdomTree reapplied for spot BTC ETFs, fueling excitement about Fidelity’s potential entry and boosting GBTC price.

This presents an interesting conundrum for seasoned traders familiar with the asset, but also for newcomers. Many may begin to bet on GBTC as they view BlackRock’s filing as a positive step or sign that Grayscale may have a successful outcome in their ongoing legal lawsuit against the U.S. Securities and Exchange Commission (SEC). Grayscale’s lawsuit against the agency for denying its ETF application has fueled trader optimism for a favorable outcome.

Fidelity’s potential filing for a bitcoin ETF or acquiring Grayscale added to the excitement and speculation. Though a Fidelity spokesperson revealed there has been no public announcement on this.

Investors should proceed with caution, however, as the news around a successful ETF isn’t the only reason for GBTC’s surge. Many are betting on the fund due to its recent liquidity issues as GBTC’s discounts have continued to narrow. The market suggests that GBTC should stay close-ended until 2042, potentially keeping it undervalued considering fees.

Grayscale and BlackRock are key institutional players in crypto, valuing digital assets and actively investing in Bitcoin. Fidelity’s entry into the crypto space has the potential to greatly enhance the industry and reshape perceptions of crypto assets. It certainly will revive the conversation surrounding ETFs.

The Grayscale Bitcoin ETF’s future is uncertain, but its impact on markets is expected to be significant and unpredictable. Crypto observers and traders alike should be sure to stay on top of the news and developments as they emerge. It certainly looks like Fidelity is joining the party.

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The post Fidelity Follows BlackRock to the Crypto ETF Front: A Slew of Factors Spark a GBTC Price Surge! appeared first on Boxmining.

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Filed under: Bitcoin - @ June 28, 2023 4:56 am