GBTC Soared 220% This year As ETF Rumors Increases

Grayscale Investment's bitcoin trust (GBTC) shares rose by 220% this year to $26.79. This rise is even higher than Nvidia Corp (NVDA), the top S&P 500 stock, which grew by 198%. The overall S&P 500 index increased by 9%. At the same time, Bitcoin's price went up to $35,000. However, some other investments like government bonds fell in value.

People believe that the U.S. Securities and Exchange Commission (SEC) might soon allow GBTC to change into a special kind of fund called an exchange-traded fund (ETF) that puts its money in bitcoin. This hope made GBTC shares' price get closer to its real value. Some traders used a strategy to make money from this by buying GBTC shares and selling bitcoin. If the change to an ETF happens, the price of GBTC will eventually match its real Net Asset Value NAV.

"GBTC is like a gift that just keeps giving. Many made money as the price got closer to its real value," said Ilan Solot from Marex Solutions.

This trading strategy might have stopped bitcoin from rising too much. But as the GBTC price keeps getting closer to its real value and the chance of it becoming an ETF gets higher, traders might stop using this strategy. This could make bitcoin's price go up”  Said Alexander S. Blume, managing partner at Two Prime Digital Assets,

In a short time, Bitcoin's price increased by 28%, reaching a 17-month high of $35,000. This rise is linked to rumors about new ETFs for bitcoin. Many believe that the SEC will allow some new bitcoin ETFs next year. If this happens, bitcoin's price might rise to $50,000 or more. But, with ETFs, more big companies can also bet against bitcoin, which might affect its price.

"More companies will be able to bet against bitcoin (short Bitcoin) with ETFs. We don’t know how this will change the market," said Blume.