Institutional participation boosts sentiment, leading to a significant increase in trading volume for GBTC and a stabilization of its negative premium.

The transition of spot ETF was rejected, FTX's closure had repercussions, and Genesis, an institutional lending platform under the same parent company DCG, also declared bankruptcy for restructuring. The discount on Grayscale's GBTC trust widened to nearly 47.54%, almost halving in the past few months. However, with a significant amount of positive news, the long-standing discount has slightly narrowed.

After asset management giant BlackRock submitted an application for a spot Bitcoin ETF to the U.S. Securities and Exchange Commission (SEC) on June 15, it seemed to mark the beginning of an institutional frenzy. BlackRock applied for a Bitcoin spot ETF, Deutsche Bank registered custody services, and exchanges supported by Citadel, Fidelity, and Guggenheim, such as EDX, will also go live this week.

In addition, asset management companies WisdomTree and Invesco have once again applied for spot Bitcoin ETFs.

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With a significant amount of positive news, Grayscale's asset management firm, GBTC, under Grayscale, saw a substantial increase in trading volume and price, despite the rejection of transitioning to a spot ETF, and the long-standing discount has also slightly narrowed.

GBTC Trading Volume Surges by 400%

Since BlackRock filed for a spot Bitcoin ETF, the trading volume of GBTC has surged by 400%.

On June 14, the day before the application, GBTC's daily trading volume was only $16.1 million, while data from The Block shows that on June 16, the volume surged to $79.61 million.

GBTC Negative Premium Stabilizes

GBTC, which attempted to apply for a spot ETF transformation to the SEC last year, was rejected. In November, it experienced a catastrophic collapse on FTX, and its institutional lending platform Genesis, also under the same parent company DCG, faced a crisis. The negative premium of GBTC once expanded to nearly 47.54%.

However, the negative premium has decreased from -44.03% on June 13 to -36.61% today in a short period, returning to the level seen in early May.

Yet, YCharts data also shows that the negative premiums of other Grayscale trust products such as Grayscale Ethereum Trust ETHE and Grayscale Ethereum Classic Trust ETC remain as high as -54.95% and -59.97%, with the increase not as significant as that of GBTC.