First Mover Americas: GBTC Discount to NAV Shrinks to Narrowest Since July 2021

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The discount for Grayscale’s Bitcoin Trust (GBTC), the world’s largest bitcoin investment vehicle, has reached the narrowest point since July 2021 on the optimism of a bitcoin spot exchange-traded fund (ETF) being approved in the U.S. Shares in GBTC have narrowed to an 8.06% discount to the trust’s net asset value (NAV), the closest it has traded to NAV since July 2021, according to data from Ycharts. The fund has traded at a discount since February 2021 and hit record lows near 50% last December. Bloomberg ETF analyst Eric Balchunas said in a social media post on X (formerly Twitter) that the narrowing is likely prompted by Grayscale’s “updated filings/SEC meeting reported Wed.”

The U.S. Department of Justice doesn’t want Changpeng “CZ” Zhao locked up until sentencing, but does want him to stay in the U.S., arguing in a new filing that he’s a “flight risk that could be managed.” Late last week, CZ’s counsel argued that the very fact he – a non-U.S. citizen holding UAE and Canadian passports – voluntarily entered the U.S. to appear before a court indicates that he’s not a flight risk. “Based on all the relevant facts, including Mr. Zhao’s voluntary self-surrender, his intent to resolve this case, and the sizable bail package he proposed, Judge Tsuchida found that Mr. Zhao presents no risk of flight, even while residing in the UAE,” last week’s filing said.

News that Metaco, the Swiss digital assets custody firm acquired by Ripple earlier this year, is working with HSBC, one of the world’s largest banks, quickly became a reason to be cheerful for many supporters of the U.S. fintech’s ledger protocol, known collectively as the “XRP army.” Named after the cryptocurrency designed to move liquidity around the XRP Ledger used by Ripple, these avid fans interpret HSBC’s choice of custody tech partner as yet another sign that financial institutions will inevitably adopt XRPL and, crucially, the XRP token. The crypto space is ferociously tribal. Token holders want to believe their blockchain of choice will rise to prominence and deliver a windfall – sometimes to a point that defies logic. For instance, the assumption that Ripple’s recent acquisition spurred HSBC’s decision ignores the fact that Metaco had been courting the bank for over 18 months, according to Adrien Treccani, the Swiss custody firm’s CEO.

Chart of the Day

• The notional open interest, or the dollar value locked, in bitcoin’s cash-settled futures trading on the CME has topped the $4 billion mark for the first time in at least a year.

• Open interest has nearly doubled since early October, indicating renewed institutional investor activity.

• CME replaced Binance as the biggest exchange for BTC standard futures early this month.

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