Grayscale BTC Trust receives a 20% discount when submitted for ETF conversion

Grayscale BTC’s trust reaches a 20% discount on the asset and the company is currently trying to switch to a Bitcoin ETF. So keep reading on our latest bitcoin news.

There is even more frustration for investors who trust Grayscale BTC as the flagship product is currently experiencing a 20.53% drop in price, according to data from Glassnode. The drop in price means that the market price of GBTC shares is 20% below net asset value and, according to the website, each GBTC share is worth 0.0093509 BTC. BTC per share was worth $ 57.44 when the market closed on Monday, and GBTC is currently trading at around $ 45.65.

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While the Grayscale Bitcoin Trust shares some similarities with the Bitcoin ETF, it does allow investors to get exposure to BTC without having to buy or hold the asset as two separate products. . GBTC allows investors to trade stocks of a trust that holds larger amounts of BTC, while a Bitcoin ETF offers the option to invest in funds that track the price of the underlying asset. Another key difference is that Grayscale GBTC shares are created as an escrow operator and can only be redeemed for a limited period of time. However, a Bitcoin ETF allows stocks to be created and redeemed at will, which means a premium or discount is unlikely given sufficient liquidity.

Major investors include Morgan Stanley, the largest US investment bank, Bill Miller and Cathie Wood’s Ark Invest. GBTC stock traded at a premium to BTC price, which changed in February when GBTC stock turned negative for the first time since the fund was launched in 2013. Since then, GBTC has been delivered at a high discount, causing losses for existing investors due to a six-month lock-up period on the initial investment. Grayscale has $ 53.5 billion in assets under management, with approximately $ 39.7 billion, or about 73% of the total, allocated to GBTC.

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Grayscale BTC confidence is approaching 20% ​​and one way to reverse that is to trade closer to their net asset value and convert GBTC to a physical Bitcoin ETF. The company clarified these intentions today after submitting an application for conversion. The New York-based company unveiled these plans in April and has released additional reports on the matter in the past few days. Grayscale’s Chief Communications Officer confirmed that the company will keep an eye on the move as soon as more information is received from the SEC.