Grayscale May Offer 70% Discount On Bitcoin

Grayscale’s Bitcoin Trust has recently attracted the attention of the market as the impending bankruptcy of Digital Currency Group will almost certainly have disastrous consequences for long-term GBTC holders by increasing the fund’s discount to NAV to a record-breaking 70%.

The potential liquidation of DCG’s GBTC holding was discussed at a recent board meeting. Digital Currency Group would be able to pay off some of its liabilities by selling the sizable investment in Grayscale’s trust at a sizable loss.

DCG recently started a critical fundraising campaign to fill a $1 billion hole left on its balance sheets by Genesis’ insolvency. Every available fund on the market rejected such a dubious offer as was to be expected, but DCG claimed it had no choice but to sell off whatever assets it could.

You wouldn’t want a discount

If significant GBTC holders start selling off their holdings, a massive 70% discount to NAV may become a reality, offering a fantastic opportunity for someone who is new to the cryptocurrency market to invest. The situation will, however, be disastrous for long-term shareholders.

Investors would likely have to deal with big losses and sell their holdings to cover their responsibilities in a manner similar to DCG’s even if they bought GBTC in late 2021 at a significant 20% discount.

Prior to this, Grayscale’s Bitcoin holdings were avidly sought after by on-chain sleuths when the market had a trust crisis and every institution in the sector was flagged as potentially insolvent and unreliable.

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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