Grayscale Bitcoin Trust stocks, a fund that allows investors to invest in Bitcoin (BTC) on the stock market, have been trading below the value of Bitcoin for 30 days. The product is getting ready to trade at such a high premium for the first time since its first appearance in September 2013.
Grayscale announced at the end of the third quarter of last year that approximately 80% of the investments in the trust, which currently manages $ 38.5 billion, come from institutional investors.
Discounted shares in the trust show that institutional investors are rushing to sell shares in the trust, perhaps preferring to invest their Bitcoins in tools that lower Grayscale’s 2% management fee and avoid the brutal redemption program.
Institutional investors often take large loans to maximize their profits. According to the statement made in January, 3 Arrows made an investment of $ 1.2 billion in the fund. While doing this, it was planned that institutional investors would make a profit when they sold their shares. However, we cannot say that this plan has worked very well. The value of GBTC lies below the Bitcoin it represents. Large investors can sell their shares for a loss, and those who provide the money they need to buy the shares can lose money on the interest they owe.
Darius Sit, one of the co-founders of the Singaporean crypto investment company QCP, said, “This is a GBTC problem, the problem is not systematic.”
Currently, Bitcoin ETFs in Canada continue to receive regulatory approval. Although there is no such approval in the USA yet, the number of applications has increased considerably. We can now say that GBTC is not the only one in this sector.