The Bitcoin Trust (GBTC) product offered by Grayscale to its customers who want to invest in Bitcoin directly saw $ 11,000. This was the lowest price the platform had ever seen.
Grayscale’s Bitcoin price drops to $11,000
The Grayscale Bitcoin Trust (GBTC) is seeing a huge discount with Bitcoin, which went on sale Friday at an incredible $11,400.
It has since recovered quite a bit to almost exactly $12,000. However, at this time, the Bitcoin price was already pushing above $20,000. This incredible price gap of $8,000 per BTC, or 35%, has never been seen before on this scale for this fund. This is because GBTC’s trading volume is pretty much lackluster and has been since September 2021, over a year ago.
Investors ignore GBTC option
Grayscale has seen a drop of 20,000 Bitcoins, or close to half a billion dollars, under management since February 2021. Its reserve has dropped from roughly 655,000 Bitcoin to 535,000. Before February, it saw a massive spike from 365,000 Bitcoins in June 2020. Most of these Bitcoins are effectively locked given the huge discount. Its assets have remained relatively stable so far.
Still, that’s a gap of $8,000. It shows how much this product has been overlooked in light of Bitcoin ETFs and ETNs that are freely traded in Europe and Canada. Instead, GBTC is limited to accredited investors for stock issuance and depressurization. Newly minted shares have a six-month lock-in period that must be held.
However, there are still not many alternatives in the US as the SEC continues to reject the spot Bitcoin ETF. For this reason, Grayscale’s products are the only option for some institutional investors in the USA. To some, the drop indicates that institutional investors have somehow disappeared over the past year.
Anecdotally, the activity of crypto-related institutional investors is kind of dead. Grayscale is also recovering this fall as it tries to take action by establishing the new Grayscale Securities, an SEC-registered broker-dealer and FINRA affiliate. They are taking over from Grayscale’s sister company, Genesis Global Trading, to become the new issuer of GBTC. It remains to be seen how much this will change in place. But a $11,000 BTC is an indication that the bears are starting to break something. cryptocoin.comAs you follow, BTC is currently trading above $20,000.
