Grayscale Bitcoin Trust GBTC shares are selling at a massive discount. The SEC’s approval of the conversion of funds now seems like a pipe dream.
The world’s largest institutional Bitcoin fund, Grayscale Bitcoin Trust (GBTC), is in bad shape. Your premium is currently at an all-time low.
The Grayscale Bitcoin Trust closed at a record -41% discount as the underlying asset continued to slide. The metric is a premium or discount to the net asset value (NAV) of the GBTC fund.
At -40%, investors can buy shares of the fund at this discount to the price of the underlying asset. However, at the moment, the bears are attacking the markets, and everything related to cryptocurrencies is unloading.
Bloomberg Intelligence analyst James Seyffart also took note of the drop, tweeting as follows:
“Of secondary importance here to the broader crypto market but $GBTC closed at a new record discount — just over 41%. Saw it get as deep as 42% in the last 30 minutes of trading. How deep can it go?”
Trading BTC Funds on Grayscale at a Massive Discount
The assets under management (AUM) figure at Grayscale has also plunged along with the broader markets. Total holdings in Bitcoin Trust just fell below $10 billion, according to Coinglass.
Furthermore, holdings per share equal $14.83, while the market price per share is $8.79, hence the 40% discount.
Grayscale’s second-largest fund, Ethereum Trust, is in no better shape. There is about $3.4 billion in AUM and a holdings-per-share figure of $11.44. Additionally, the market price per share is 7.71 dollars, which is equivalent to a discount of -32.6% for said fund.
Roundhill CEO Will Hershey commented that, “Thinking about this further, I think today’s widening may be explained in part by a lower probability assigned to potential post-FTX ETF conversion.”
Regulators are likely to be tough on cryptocurrencies now. This could end any ray of hope that the SEC will approve the conversion of the GBTC fund to a cash ETF.
Investors, both retail and institutional, are getting very nervous now, and a final capitulation event is unfolding.
Bitcoin Plummets to New Cycle Low
Bitcoin prices have tumbled to a new low for this bear market cycle, widening the discount on Grayscale as well. BTC fell to $15,700 a few hours ago on Thursday morning; being thus, the lowest value the asset has had since November 2020.
Bitcoin has now lost 18.5% over the last week and is down 76.3% from its all-time high around this time last year. At press time, the asset was trading at $16,441, according to CoinGecko.
The crypto “great purge” seems to have bottomed out in the last few hours. However, the pain may not be over yet.
By Audy Castaneda
