Meanwhile, GBTC continues to trade at a sharp discount. From a low of 21.23% last week, the discount has recovered somewhat and, during that time, the price of BTC plummeted by almost 20%.
It’s been months since Grayscale Bitcoin Trust has been trading at a big discount.
GBTC is not the only one, as the discount on ETCG was actually as low as 54.9% and is currently just under 40%. While ethe is listed at a discount of 4.52%, LTCN has a premium of 1,168%, and BCHG almost 182%, according to Bybt.
But, of course, GBTC is the most important thing.
The end of February 2021 was the first time it turned negative briefly, but the next fall below zero on March 2 was the last time it saw positive numbers. Since then, it has been steadily declining, reaching a new low of 21.23% on 13 May.
At the time of writing, the GBTC is trading at a 15.05% discount on the NAV.
The time between the time the GBTC stock discount hit an all-time low this year and recovered slightly this week, the price of Bitcoin plummeted by almost 20%.
“The GBTC premium is moving away from BTC’s price action recently,” noted Avi Sanyal, BlockTower’s Chief Operating Officer.
While this discount may make GBTC look attractive on paper, James Seyffart, a Bloomberg ETF analyst, has pointed out that GBTC is trading at a discount due to shares that entered the market in recent months, and soon, in June and July, there will be an avalanche of them.
“Currently around 530 million shares that could be eligible to trade and amount to 692 million at the end of August,” he stated.
As we reported, Grayscale has been trying to limit the discount by announcing the repurchase program, which was recently increased to $ 750 million; the discount has not yet received a good hit. While converting GBTC to an ETF would eliminate any discount and premium, no one knows when it will happen.
While there have been no new creations since Grayscale stopped them in late February, the 6-month lock on shares already created is ending, increasing supply by 31% over the next ~ 3.5 months, he said.
As Scopus Asset Management revealed in its filing with the SEC, it nearly doubled its exposure to Bitcoin via GBTC from December 31 from 173k GBTC to 321k GBTC shares.
“I am convinced that one factor here is the money that was invested in these grayscale trusts. There were many institutions that crowded in to take advantage of the huge premiums. Some didn’t care about the encryption, and some did. they probably are buying it right now, ”Seyffart said.
Trader Loomdart, an advisor to eGirl Crypto, has a similar opinion. He noted last month that those funds that became GBTC just 5-6 months ago without having “any real crypto love” are likely to sell their GBTC shares when they are unlocked, which will start next week. and will accelerate from here.
– Blueberry? (@Loomdart) May 15, 2021
This is why Loomdart sees “yearning for GBTC at a 30% discount and crushing a lot on BTC” as the next big deal.
“With GBTC it is starting to change drastically, big sign that the big ones are starting to arbitrate GBTC because it is profitable enough to do so,” he added.
On Monday, Vailshire Partners, a smaller hedge fund that manages less than $ 30 million in AUM, shared on Twitter that they took advantage of the discount by buying “an additional 6,753 shares of GBTC today”.
However, it remains to be seen if the GBTC trades at a discount or if another drop will occur before it starts to fully recover.
Bitcoin / USD BTCUSD
41,758.2347- $ 3,181.98-7.62%
Volume 55.28 b Change – $ 3,181.98 Open $ 41,758,2347 Circulating 18.71 m Market Capitalization 781.43 b
Anty has been involved in the cryptographic space full time for over two years. Prior to her blockchain beginnings, she worked with the NGO Doctor Without Borders as a fundraiser and has since explored, read and created for different segments of the industry.