The biggest Bitcoin fund just hit a record -35% discount — A warning for BTC price?

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Grayscale Bitcoin Trust GBTC has been trading at an increasing discount since early 2021.

) supply, or over 640,000 BTC, is trading at a record discount compared to the value of its underlying assets.On Sep. 23, the $12.55 billion closed-end trust was trading at a 35.18% discount, according to the latest data.To investors, GBTC has long served as a great alternative to gain exposure in the Bitcoin market despite its 2% annual management fee. This is primarily because GBTC is easier to hold for institutional investors because it can be managed via a brokerage account.

For most of its existence, GBTC traded at a hefty premium to spot Bitcoin prices. But It started trading at a discount after the debut of theUnlike an ETF, the Grayscale Bitcoin Trust does not have a redemption mechanism. In other words, GBTC shares cannot be destroyed or created based on fluctuating demand, which explains its heavily discounted prices compared to spot Bitcoin.

Grayscale's efforts to convert its trust into ETF failed after the Securities and Exchange Commission's rejection in June. In theory, SEC's approval could have reset GBTC's discount from current levels to zero, churning out profits for those who purchased the shares at cheaper rates.

Source: News Formal (newsformal.com)

 

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Ooh 😮 Grayscale GBTC is not doing so well

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This not warning, it is the red flag

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