GBTC had been trading at a significant discount to the value of the Bitcoin it holds. That gap is likely to close as traders anticipate an ETF approval.

The judges' decision won't allow GBTC to convert into an ETF automatically. The federal government can appeal the decision to the Supreme Court or the SEC could attempt to deny the application to convert to an ETF for another reason.

Still, the decision makes it an uphill battle for the SEC to keep spot Bitcoin ETFs from coming to market. In addition to Grayscale, BlackRock (BLK), Fidelity and other companies have also applied to launch a spot Bitcoin ETF.

Eoin Treacy's view

The SEC is expected to give a ruling on the applications for spot priced ETFs before the Labor Day holiday which is this weekend. It is unclear whether today’s announcement will influence that decision, but the odds are improving that the SEC’s reluctance to grant permission for spot price ETFs will eventually be overcome.
Bitcoin rebounded emphatically on the news to confirm near-term support at the lower side of the three-month range. The creation of several ETFs will soak up the available supply of the token while also increasing volume through Coinbase’s exchange.
Coinbase is rebounding from the region of the 200-day MA as it holds the breakout from its base formation.
Riot Platforms is firming from the region of the upper side of the base formation and the 200-day MA.’

The Grayscale Bitcoin Trust premium before the introduction of bitcoin futures in 2017 and moved to a discount in 2021. Closed end funds or investment trusts typically trade at discounts to allow for the cost of running the fund. There is potential for the discount to continue to narrow but it is unlikely to move to a premium unless there is an acute shortage of bitcoin.