Share this article
Grayscale Bitcoin Trust Discount Hits Record at 26.5%
Analysts don't expect a spot bitcoin ETF conversion anytime soon, and in the meantime, investors in the GBTC fund are getting charged fees.
Updated Dec 8, 2022, 5:25 p.m. Published Jan 19, 2022, 6:25 p.m.
Make us preferred on Google
Grayscale Bitcoin Trust's (GBTC) shares have widened their discount relative to the underlying cryptocurrency held in the fund, reaching a record of 26.5% on Wednesday.
GBTC has been the preferred venue for institutional investors to gain exposure to crypto without having to purchase bitcoin directly, but the shares have traded at a steep discount over the past year as demand for the product shrank. (Grayscale Investments, which manages the trust, is a unit of Digital Currency Group, which also owns CoinDesk.)
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
The premium flipped to a discount last February, and the discount has steadily widened ever since due to several factors, including the launch of spot-based exchange-traded funds (ETFs) in Canada, which provided an alternative to those looking to invest in bitcoin through a stock market vehicle.
The persistent discount could also be due to investor skepticism regarding Grayscale's plan to convert the fund into a spot-based ETF. Some analysts don't expect a conversion anytime soon, and in the meantime, investors are getting charged fees.
The U.S. Securities and Exchange Commission hasn't approved a spot bitcoin ETF.
"There's still no way for bitcoin to ever leave GBTC, which means it should continue to trade with a substantial discount to reflect that illiquidity," Dave Nadig, director of research and chief investment officer at ETFTrends.com, wrote in an email to CoinDesk.
The recent crypto sell-off also may have contributed to a wider GBTC discount. Bitcoin is down roughly 37% from its all-time high of nearly $69,000 in November, although the cryptocurrency's price appears to be stabilizing at about $42,000 at the time of writing.
More For You
Pudgy Penguins is building a multi-vertical consumer IP platform — combining phygital products, games, NFTs and PENGU to monetize culture at scale.
What to know:
Pudgy Penguins is emerging as one of the strongest NFT-native brands of this cycle, shifting from speculative “digital luxury goods” into a multi-vertical consumer IP platform. Its strategy is to acquire users through mainstream channels first; toys, retail partnerships and viral media, then onboard them into Web3 through games, NFTs and the PENGU token.
The ecosystem now spans phygital products (> $13M retail sales and >1M units sold), games and experiences (Pudgy Party surpassed 500k downloads in two weeks), and a widely distributed token (airdropped to 6M+ wallets). While the market is currently pricing Pudgy at a premium relative to traditional IP peers, sustained success depends on execution across retail expansion, gaming adoption and deeper token utility.
More For You
Strive clears Semler debt off books, buys more bitcoin after $225 million preferred stock sale
The offering of SATA shares was oversubscribed and upsized from the initial $150 million target.
What to know:
- Strive (ASST) raised $225 million through an upsized and oversubscribed SATA preferred offering.
- The company retired $110 million of the $120 million of legacy debt from recently acquired Semler Scientific (SMLR)
- Strive also increased its bitcoin treasury by 333.89 coins, bringing the total to roughly 13,132 BTC worth more than $1.1 billion.
Top Stories
