June 13, 2024


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.


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