Grayscale Bitcoin Trust Premium Drops To New All-Time Low Of 40%

The Grayscale Bitcoin Trust (GBTC), the largest institutional Bitcoin fund in the world, is in poor condition. Right now, its premium is at an all-time low.

The underlying asset continued to decline, as the Grayscale Bitcoin Trust closed at a record discount of -41%. The indicator represents a premium above or a discount from the GBTC fund’s net asset value (NAV).

Investors can purchase shares of the fund for -40% off the value of the underlying asset. However, the bears are currently destroying the markets, and anything cryptocurrency-related is being sold off.

Bitcoin fund trading in Grayscale at significant 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.”

Regulators are probably going to crack down on cryptocurrency now. Any chance of the SEC approving the conversion of the GBTC fund to a spot ETF could be destroyed by this.

Investors are becoming really uneasy right now, and a last capitulation event is taking place.

Drops to new cycle low for Bitcoin

The Grayscale discount has increased as a result of the recent collapse in bitcoin prices to a new low for this bear market cycle. BTC has dropped to $15,700 on Thursday morning. Since November 2020, the asset has never been lower than it is now.

Bitcoin is now down 76.3% from its all-time high reached at this time last year and has dropped 18.5% over the last week. 

Over the past couple of hours, the massive crypto purge seems to have reached a bottom. However, the suffering can still be ongoing.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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