It has been a boring weekend for Bitcoin struggling to clear the $20,000 resistance zone.
Another indicator of a possible case of waning institutional interest in the flagship cryptocurrency is Grayscale Bitcoin Trust (GBTC) discounting to a new record high.
It was currently trading at a 36.7% discount to BTC spot prices, setting the largest discount in Bitcoin fund history. The rising numbers could also indicate that players are looking to other alternative vehicles for BTC investments, such as exchange-traded funds (ETFs). Arcane Research recently stated:
“There are good arguments to invest in GBTC at current discounts. The fact that the discounts have not been reduced suggests that Wall Street is overlooking BTC opportunities or is reluctant to make a long-term commitment to BTC. As sentiment improves, the GBTC discount may be reduced. In turn, GBTC may absorb some of the demand for BTC and thus reduce BTC’s upside potential.”
Today, GBTC is the largest BTC fund, managing 635,240 BTC, worth around $12 billion. That is more than 3.3% of the circulating supply of the cryptocurrency. Since 2015, GBTC has been trading at a positive premium of almost 20%, but switched to a negative premium last year. The average discount throughout the period was 19%. It is worth noting that the gap formed after the launch of the Purpose Bitcoin ETF on the Toronto Stock Exchange last February. The SEC has been hostile towards a cash ETF. The commission recently blocked WisdomTree’s application for one in the United States. As a result, the big players are flocking to other Bitcoin-linked funds hitting the market. Meanwhile, Grayscale filed a lawsuit against the SEC regarding the conversion of GBTC into a points-based Bitcoin ETF. The asset manager had claimed that the regulatory agency treats Bitcoin spot ETPs with “particular harshness” and its assessment of them is “arbitrary, capricious and discriminatory.”
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This post Grayscale GBTC surges to a new record 36.7% off
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