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Grayscale’s GBTC Discount to NAV Breaks Records as Spread Widens by More Than 35% – Bitcoin News


Grayscale Investment’s Bitcoin Trust (GBTC) fell to a new low this week as the bitcoin fund hit a record low of 35.18% over the spot bitcoin price. The spot price of GBTC has sunk for a total of 577 consecutive days.

GBTC vs NAV discount expands by 35% – Fund hits all-time low vs BTC Spot price

Grayscale Bitcoin Trust (OTCMKTS: GBTC) is the oldest and one of the most popular bitcoins (BTC) funds on the market today. However, in recent times GBTC has been depreciated against BTCspot market value. Unfortunately, GBTC has been trading at a discount instead of a premium since February 26, 2021, or for about 577 consecutive days.

The current pre-market value of GBTC is $11.20 and according to the Securities and Exchange Commission (SEC) filethere are 643.572 BTC held by trusts. Indicators indicate that 643.572 BTC equivalent to 3.065% of the 21 million bitcoin supply cap. GBTC’s 35.18% discount is the fund’s all-time low compared to BTC spot value since the fund’s inception.

Grayscale's GBTC Discount for NAV Breaks Record as Spread Widens Over 35%
GBTC discount or premium for 3-year NAV chart on September 26, 2022, via ycharts.com.

Many believe that GBTC’s discount stems from the fact that there are a number of exchange-traded funds available today, and Grayscale’s attempt to turn GBTC into an ETF (exchange-traded fund) has so far failed. The US SEC rejected the company’s latest attempt in June and Grayscale decided sue the SEC through denial.

Trader and entrepreneur Bob Loukas discussed the GBTC situation on Saturday. “Bitcoin Grayscale Drops Hit a Record 35%,” Loukas tweeted. “As of the end of October 2020. Meh institutions. If BTC dropped to the lower teens next month, this [is] a good choice. Must be willing to hold [the] points where the redemption option unlocks value. Even so, discounts must be limited,” added Loukas.

Grayscale's GBTC Discount for NAV Breaks Record as Spread Widens Over 35%

GBTC was close to a 30% discount last March according to Glassnode statistics and at that time institutional investors were rushing to buy GBTC at a discount. Grayscale and its parent company Digital Currency Group (DCG) have also tried to overcome the discount by taking advantage of share buybacks.

While institutional investors have flocked in the past and Loukas explained that GBTC could be a good option, investors don’t seem to be in a hurry for GBTC’s discounted price. “Who thought to be exposed to [bitcoin] Is it a good idea to adopt GBTC in the first place? “Tom Mitchellhill” tweeted in Monday. Mitchelhill added: “They are selling it at a literal 36% discount and the market still refuses to touch it.

If SEC approves GBTC to convert into ETF, discount for BTCSpot prices may be deleted. However, the US regulator has yet to approve a spot market exchange-traded fund, and the SEC has cited market manipulation as one of the main reasons for rejecting a fund with factors such as so. Meanwhile, many merchants wholeheartedly believe BTC Lower spot prices for teenagers are coming.

“Some of us talked about needing to see $8-12K BTC before we can reset and get a new bull [underway]“Classic Ape Twitter Account tweeted last week. “Still not have. My company has been setting this goal for about a year. Oh, and the GBTC discount is also an issue. “

Cards in this story

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What do you think about trading GBTC with 35% discount off spot bitcoin price this week? Let us know your thoughts on this topic in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a fintech journalist living in Florida. Redman has been an active member of the crypto community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written over 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




Image credits: Shutterstock, Pixabay, Wiki Commons, Editorial source: Rcc_Btn / Shutterstock.com, ycharts.com

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