Grayscale NAV surpasses BlackRock as IBIT experiences its initial discount to Bitcoin since inception.

BlackRock’s iShares Bitcoin Trust experienced its initial discount to its Net Asset Value (NAV) on January 19, falling to a discounted rate of -0.30%, as per official data from BlackRock.

BlackRock discount to NAV

“The table and line graph above illustrate the variations between the daily closing price of the fund’s shares and the fund’s net asset value. The closing prices are established by the fund’s listing exchange.” – BlackRock

In contrast, following an extended period of significant discount, Grayscale’s (GBTC) NAV is now marginally tighter at -0.27%, according to Y Charts data. GBTC experienced a remarkable 48% discount to NAV on December 22. However, as expectations for its conversion to a spot Bitcoin ETF increased, the discount narrowed, reaching just -1.55% on the day of conversion. The discount has continued to decrease and has even surpassed some of the ‘Newborn Nine’ Bitcoin ETFs, including IBIT.

During its inaugural week, the iShares Bitcoin Trust saw a fluctuating NAV per share, starting at $26.59 and dropping to $23.87 by January 19. The trust’s outstanding shares exhibited a substantial rise from 400,000 to over 50 million during the same timeframe.

The NAV premium/discount varied slightly, recording a premium of 0.16% on the launch day, peaking at 0.42% by January 17, before shifting to a discount. This fluctuation reflects investors’ assessment of the shares in relation to the underlying Bitcoin assets held by the trust. A premium indicates that shares are valued higher than the NAV, while a discount signifies a lower valuation. The reference rate for Bitcoin utilized was $41,898, calculated between 8 PM and 9 PM GMT (3 PM – 4 PM EST), as shown in the chart below.

CF Benchmarks Index BRRNY

The underlying Bitcoin price has approached the psychological support level of $40,000, trading at $40,840 as of the time of reporting, while IBIT shares are priced at $23.39 pre-market after closing at $23.80 on Friday, January 19.

Consequently, IBIT shares have decreased by 1.72% since Friday’s trading session. In comparison, the underlying asset, Bitcoin, will have dropped approximately 2.5% if it does not recover before the reference rate (BRRNY) is calculated later today. If IBIT shares align with Bitcoin throughout January 22, it is likely to reverse the discount and potentially rise to a premium as high as 0.7% based on current estimates. However, with the primary market not opening for several hours, IBIT may close this gap during official trading hours.

Due to the time lag in reporting ETF data, the effect of the reported NAV is somewhat limited. In its prospectus, BlackRock indicated it would release an intra-day indicative NAV (IIV). However, this data is not available on its official website but should be accessible under IBIT.IIV through Nasdaq trading terminals.

Since its inception, the Assets Under Management (AUM) of the iShares Bitcoin Trust have reached $1,346,912,907.59, with 33,430 BTC under management, highlighting the scale at which the trust is functioning and the level of investment it has garnered in a brief period. Coupled with the increase in outstanding shares, the overall condition of the trust suggests a rising interest from investors as the number of shares has increased more than tenfold.

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