Grayscale Bitcoin Trust Premium Slumps to New All-Time Low of ‑40%

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The world’s largest insti­tu­tion­al Bit­coin fund, the Grayscale Bit­coin Trust (GBTC), is in bad shape. Its pre­mi­um is cur­rent­ly at a record low.

The Grayscale Bit­coin Trust closed at a record dis­count of ‑41% as the under­ly­ing asset con­tin­ued to tank. The met­ric is a pre­mi­um or dis­count to the net asset val­ue (NAV) of the GBTC fund.

At ‑40%, investors can buy shares in the fund at this dis­count from the price of the under­ly­ing asset. How­ev­er, at the moment, the bears are maul­ing mar­kets and any­thing cryp­to-relat­ed is get­ting offloaded.

Bloomberg Intel­li­gence ana­lyst James Seyf­fart also took note of the fall:

Grayscale Bitcoin Fund Trading At Massive Discount 

The assets under man­age­ment (AUM) fig­ure at Grayscale has also plum­met­ed along with the wider mar­kets. The total hold­ings in the Bit­coin Trust have just dropped below $10 bil­lion, accord­ing to Coin­glass.

Fur­ther­more, the hold­ings per share equate to $14.83, where­as the mar­ket price per share is $8.79, hence the 40% discount.

Grayscale’s sec­ond-largest fund, the Ethereum Trust, is not in any bet­ter shape. There is around $3.4 bil­lion in AUM and hold­ings per share fig­ure of $11.44. Addi­tion­al­ly, the mar­ket price per share is $7.71, equat­ing to a dis­count of ‑32.6% for that fund.

Round­hill CEO Will Her­shey commented:

“Think­ing more about this, I think today’s widen­ing can be in part explained by a low­er prob­a­bil­i­ty assigned to poten­tial ETF con­ver­sion post FTX.”

It is like­ly that reg­u­la­tors will come down hard on cryp­to now. This could wipe out any glim­mer of hope for the SEC approv­ing the con­ver­sion of the GBTC fund to a spot ETF.

Investors, both retail and insti­tu­tion­al, are get­ting very jit­tery now, and a final capit­u­la­tion event is play­ing out.

Bitcoin Plummets to New Cycle Low

Bit­coin prices have crashed to a new low for this bear mar­ket cycle, also widen­ing the Grayscale dis­count. BTC slumped to $15,700 a few hours ago on Thurs­day morn­ing. It is the low­est the asset has been since Novem­ber 2020.

Bit­coin has now lost 18.5% over the past week and is down 76.3% from its all-time high this time last year. At the time of press, the asset was trad­ing at $16,441, accord­ing to CoinGecko.

The big cryp­to purge appears to have found a bot­tom over the past cou­ple of hours. How­ev­er, the pain may not be over just yet.

Disclaimer

All the infor­ma­tion con­tained on our web­site is pub­lished in good faith and for gen­er­al infor­ma­tion pur­pos­es only. Any action the read­er takes upon the infor­ma­tion found on our web­site is strict­ly at their own risk.



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