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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.
The largest public bitcoin trust is facing an unusual situation: Its share price is dropping faster than the underlying cryptocurrency.
STORY CONTINUES BELOW
- 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.
Read More: Digital Assets Under Management in ETPs Rose 50% to $43.9B in February
Zack Voell
Zack Voell is a financial writer with extensive experience in cryptocurrency research and technical writing. He has previously worked with leading cryptocurrency data and technology firms, including Messari and Blockstream. His work (and tweets) has appeared in The New York Times, Financial Times, The Independent and more. He owns bitcoin.
