Grayscale’s premier fund, the Grayscale Bitcoin Trust, experienced a surge in trading as its discount to net asset value narrowed to 35.7%. The discount has been in place since early 2021, but shares in the fund rose by 4% on the back of successful oral arguments in its trial against the SEC. This brought the discount down to its lowest level since October, making shares in the fund cheaper than the underlying bitcoin.
Interest Rate Traders Re-Evaluate Bets Following Powell’s Hawkish Testimony
The U.S. Federal Reserve Chair, Jerome Powell, gave hawkish testimony yesterday that has caused interest rate traders to re-evaluate their bets. Powell suggested that solid economic data means the “ultimate level of interest rates is likely to be higher than anticipated.” The CME’s FedWatch tool now indicates an almost 80% probability of a 50 basis point increase in the target range on March 22. This tool analyzes changes to the rate as implied by 30-day Fed Funds futures pricing.
Crypto-Related Stocks Experience Mixed Results
According to NYSE data, crypto-related stocks saw mixed results in trading today, with beleaguered crypto-friendly bank Silvergate Capital dropping by around 5%. However, it was a successful day for the Grayscale Bitcoin Trust, which saw a surge in trading.
Strong Economic Data Continues to Come Out of the U.S.
Robust economic data continues to be released from the U.S., which is the opposite of what Powell wants to see. This includes job openings (JOLTs) and ADP, which both beat estimates. January’s JOLTS figure of 10.82 million exceeded the estimated figure of 10.55 million.
Bitcoin Holds Firm as DXY Stays Elevated
Bitcoin remains steady at around $22,000, while the DXY remains elevated at 105. This is despite Powell’s hawkish testimony, which may indicate investors still have confidence in crypto assets.
Conclusion
The Grayscale Bitcoin Trust saw a surge in trading today as its discount to net asset value narrowed to its lowest level since October. Meanwhile, Powell’s hawkish testimony caused interest rate traders to re-evaluate their bets, and crypto-related stocks saw mixed results. Despite robust economic data from the U.S., bitcoin held firm, and the DXY remained elevated.
