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Grayscale Bitcoin Premium Flips Negative as BTC Stays Below $50,000
The gap between the GBTC share price and the implied price of the underlying bitcoin has collapsed to a 4% discount from a 35% premium late last year.
By Zack Voell
Updated Sep 14, 2021, 12:18 p.m. Published Feb 26, 2021, 8:41 p.m.
The largest public bitcoin trust is facing an unusual situation: Its share price is dropping faster than the underlying cryptocurrency.
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- Historically, the Grayscale Bitcoin Trust (GBTC) trades at a premium to bitcoin (BTC) itself. But that premium turned into a discount this week, with GBTC closing at a price nearly 4% lower than the market value of the underlying asset on Thursday.
- In mid-December, GBTC shares traded at more than a 35% premium, according to data from YCharts, a reminder that price action for GBTC doesn't perfectly match bitcoin's own price action by any means.
- NOTE: Grayscale is owned by Digital Currency Group, CoinDesk's parent company.
- Grayscale's bitcoin trust isn't the only one trading at a discount, however. 3iQ's Canadian Bitcoin Fund (QBTC), although a smaller fund than Grayscale, was also trading at a roughly 4% discount to its underlying asset, according to market data from CryptoQuant.
- GBTC and QBTC are trading at discounts as bitcoin itself is selling off, dropping to below $45,000 Friday afternoon before slightly recovering to above $48,000.
- At last check, BTC was trading at $46,877, based on CoinDesk's Bitcoin Price Index, with a year-to-date gain just below 60%.
- Analysts have speculated the shrinking premium might be due to reduced demand for bitcoin, or due to increasing competition among providers of bitcoin-focused exchange-traded products.
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