As the crypto market has been bleeding profusely over the past few days, shares of Grayscale Bitcoin Trust (GBTC) have increased their discounts in relation to the crypto underlying the fund.
GBTC premium to new low
According to recent figures From CoinGlass, the negative premium for trust hit a new all-time low (ATL) as bitcoin struggles around the $35,000 mark. GBTC has been trading on a steady decline since February last year, with a premium of 30% now.
Grayscale Bitcoin Trust is an investment vehicle provided by Grayscale Investments, one of the largest investment managers for institutions venturing into the cryptocurrency space.
The GBTC Fund allows institutional investors to gain exposure to bitcoin through a regulated traditional investment vehicle without having to directly buy, sell or store assets.
Each GBTC share represents approximately 0.00095 BTC and tracks the market cap of Bitcoin. The shares have a minimum holding period of six months and a minimum investment limit of $50,000, making it very difficult for retail investors to get onboard.
However, with the recent decline in institutional demand for the cryptocurrency, the trust’s share premium has traded at a steep discount.
The premium represents the difference between the price of the underlying asset, in this case bitcoin, and the value of the shares of the trust.
The latest drop in premium discounts can be attributed to a number of factors, including the launch of several spot exchange-traded funds (ETFs), which offer institutional investors the option to invest in bitcoin through a regulated stock market vehicle. does.
Grayscale bitcoin ETF not in sight
Last year, Grayscale filed for conversion of its Bitcoin Trust into a spot bitcoin ETF that would be backed by real units of the digital asset and not just tied to it through derivative contracts.
However, the United States Securities and Exchange Commission (SEC) has still shown no sign of approving the spot bitcoin ETF, citing a number of regulatory concerns.
Just a few days ago, First Trust and Skybridge Bitcoin Trust joined a long list of bitcoin ETF applications rejected by the SEC.
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