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Grayscale Discount Might Signal Start of Fresh Bitcoin Rally, Bloomberg's McGlone Says
Far from a signal of distress, a negative level on the "Grayscale premium" might signal a market reset for a fresh bitcoin rally.
Bloomberg Intelligence analyst Mike McGlone, who correctly predicted bitcoin's ascent this year to a price above $50,000, says recent market indicators suggest $100,000 could be the next threshold.
STORY CONTINUES BELOW
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McGlone wrote in a March outlook report that a recent drop below zero in the so-called Grayscale premium – a closely watched metric in cryptocurrency markets – could signal that last week's swift 21% sell-off to about $43,000 might have reset the market for a fresh run. As of Thursday, prices had rebounded to about $50,000.
The Grayscale premium refers to the difference between price of bitcoin as implied by cost of shares in the publicly traded Grayscale Bitcoin Trust (GBTC), and the price of bitcoin as traded on cryptocurrency exchanges. Historically, it's been positive. For a story on the Grayscale premium flipping negative, go here. (Grayscale is a unit of Digital Currency Group, which also owns CoinDesk.)
- "Bitcoin's end-of-February price disparities on U.S. regulated exchanges portend a firming price foundation, if history is a guide," McGlone wrote.
- "Indicating capitulation selling, the Grayscale Bitcoin Trust closed at its steepest discount ever, while December CME-traded bitcoin futures settled about 20% higher.
- "Normal maturation and increasing market depth will narrow wide price disparities, and we view the end-of-February extremes as an indication of just how nascent bitcoin still is."
Bradley Keoun
Bradley Keoun is CoinDesk's managing editor of tech & protocols, where he oversees a team of reporters covering blockchain technology, and previously ran the global crypto markets team. A two-time Loeb Awards finalist, he previously was chief global finance and economic correspondent for TheStreet and before that worked as an editor and reporter for Bloomberg News in New York and Mexico City, reporting on Wall Street, emerging markets and the energy industry. He started out as a police-beat reporter for the Gainesville Sun in Florida and later worked as a general-assignment reporter for the Chicago Tribune. Originally from Fort Wayne, Indiana, he double-majored in electrical engineering and classical studies as an undergraduate at Duke University and later obtained a master's in journalism from the University of Florida. He is currently based in Austin, Texas, and in his spare time plays guitar, sings in a choir and hikes in the Texas Hill Country. He owns less than $1,000 each of several cryptocurrencies.
