
Grayscale’s battle for a Bitcoin ETF
$GBTC just closed with a ~26.5% discount..... a new low. Brutal. https://t.co/xhR50Litmn pic.twitter.com/kggc9o15zT
— James Seyffart (@JSeyff) January 18, 2022
$88,026.00
1.13%$2,065.77
-0.08%$2.47
1.19%$630.95
-1.16%$144.40
1.36%$0.999868
-0.00%$0.205094
10.77%$0.768946
2.33%$0.22982
1.14%$2,062.76
-0.15%$87,837.00
0.81%$15.90
3.62%$22.70
3.25%$0.0000156
16.09%$0.297209
2.13%$9.78
0.28%$3.61
-1.32%$2,471.65
-0.16%$0.198253
0.71%$0.999586
-0.04%$2.56
6.53%$95.48
2.79%$4.72
1.97%$339.23
3.55%$6.82
1.69%$5.04
1.85%$2,065.38
-0.13%$0.819137
-10.72%$16.16
-0.91%$0.999392
-0.01%$1.00
-0.14%$2,195.13
-0.16%$7.02
-0.73%$29.24
0.21%$227.27
2.79%$0.00000886
11.33%$3.03
3.21%$5.98
0.87%$1.046
0.29%$1.16
0.07%$6.31
2.65%$50.49
0.80%$0.953252
2.01%$23.97
1.08%$0.106082
-0.01%$35.77
2.47%$0.848149
0.46%$187.02
-1.32%$18.53
1.13%$87,938.00
0.97%$0.999885
0.27%$11.84
2.93%$276.49
2.38%$0.02722861
3.79%$0.428767
2.96%$4.91
1.31%$4.12
5.19%$0.243625
10.03%$3.66
0.36%$3.18
2.00%$0.0781
1.02%$0.62207
2.34%$1.00
0.00%$87,847.00
0.86%$0.398601
2.45%$0.215642
5.26%$4.02
-0.01%$6.21
-1.90%$1.00
-0.07%$0.571342
0.51%$0.922264
1.64%$0.571876
1.02%$11.33
0.01%$87,935.00
1.18%$0.539934
18.27%$2,066.82
-0.15%$2,148.31
-0.05%$0.677126
8.23%$0.00001515
8.83%$1.17
1.94%$0.962859
4.11%$0.073565
-0.50%$150.51
1.03%$78.24
-0.45%$1,337.11
5.48%$0.734466
6.30%$10.94
3.90%$0.216018
4.20%$1.02
4.87%$0.99971
-0.10%$0.106481
3.10%$2,335.21
-0.20%$17.31
-0.20%$1.073
1.10%$0.997886
0.02%$0.01501652
1.99%$0.587344
2.09%$8.05
2.86%$0.01885867
3.53%$1.00
-0.06%$2,191.09
-0.31%$82,700.00
-4.37%$0.999983
0.03%$630.88
-1.16%$2.49
7.55%$0.31388
4.18%$0.735424
1.79%$0.204873
8.06%$1.00
-0.08%$3,034.19
0.00%$0.562841
10.38%$0.00000073
4.39%$87,871.00
1.07%$35.61
1.61%$2.40
-7.06%$184.13
1.05%$0.00007269
7.90%$0.435222
2.24%$3,029.17
0.01%$0.110717
2.89%$0.01312008
3.05%$2,149.77
-0.10%$0.174493
2.44%$1.001
0.08%$0.620376
11.43%$3.37
0.70%$158.05
1.38%$0.00102676
-19.95%$18.16
1.82%$2.07
6.27%$0.641977
5.26%$37.29
8.29%$0.00646489
1.44%$3.62
3.09%$0.752087
2.66%$0.572084
4.74%$8.09
2.82%$7.98
0.06%$0.999717
-0.01%$19.51
0.47%$0.288041
3.11%$0.492124
2.48%$0.818438
0.83%$0.999508
0.13%$0.204843
10.92%$0.074009
-0.59%$86,643.00
1.56%$0.182137
2.87%$0.806546
0.15%$0.999972
0.05%$2,191.03
-0.24%$7.49
0.27%$0.00921266
2.21%$0.095939
3.13%$2.93
2.68%$1.33
6.11%$2,065.41
-0.18%$0.04918538
1.93%$1.00
-0.00%$0.577595
3.32%$0.00002326
2.84%$0.455315
0.03%$0.00721708
1.31%$88,012.00
0.95%$0.00798051
8.55%$2,063.65
-0.14%$1.60
10.53%$87,082.00
0.28%$0.540577
2.19%$0.00000043
0.18%$26.08
0.04%$0.243561
10.11%$2,065.37
-0.11%$0.442015
6.09%$110.45
0.01%$45.63
2.29%$1.001
0.00%$1.081
0.11%$0.04083258
11.46%$0.00000194
-1.14%$2,154.82
-0.02%$87,695.00
0.77%$0.19486
-1.97%$1.092
-0.41%$0.921772
1.02%$0.01131546
-1.05%$2,076.29
-1.86%$0.00006723
3.04%$2,063.97
-0.28%$0.00425436
1.13%$87,415.00
1.03%$1.42
0.23%$1.49
5.63%$0.285472
1.60%$0.999383
0.02%$0.296541
4.21%$132.30
0.34%$1.001
-0.03%$2.97
7.73%$2,046.49
-0.28%$1.36
2.65%$1.005
-0.05%$1.00
-0.08%$4.12
3.08%$0.929129
2.40%$2,066.54
-0.01%$0.03092584
0.75%$18.49
1.85%$0.218201
1.26%$0.102886
1.91%$0.081696
2.18%$24.48
3.04%$1.21
4.53%$1.41
2.33%$2,259.81
0.00%$0.293682
1.72%$2,179.96
-0.00%$88,206.00
1.33%$0.668484
4.97%$0.00391102
10.08%$0.28651
8.30%$2.99
-1.09%$87,962.00
1.00%$0.03579093
3.10%$0.04066666
2.31%$0.00272305
2.55%$0.121685
3.60%$2,241.62
-0.05%$0.270121
1.27%$0.595037
10.19%$0.03489512
1.70%$0.52969
-1.51%$0.129175
8.28%$0.01338198
2.84%$0.00292284
5.56%$1.001
0.04%$2,061.77
-0.14%$0.4714
3.59%$0.00562202
3.48%$3,020.99
-0.04%$0.751559
2.64%$0.651063
4.55%$1,767.26
1.12%$0.00000012
-20.01%$0.00
5.95%$0.24949
1.55%$0.285237
-0.45%$0.00270568
19.20%Reading
Investors in the Grayscale Bitcoin Trust (GBTC) face more losses as the popular investment product hit its record discount of 26.53%, per data from YCharts.
GBTC has long been an investment tool of choice for many institutional investors, offering exposure to Bitcoin without the need to purchase the actual underlying asset.
It comes with several drawbacks though, including an annual management fee of 2% and a six-month lockup period.
A hefty discount to net asset value (NAV) not only means that GBTC's existing holders are running at a loss but may also be seen as a bearish indicator of wider institutional sentiment towards Bitcoin.
In other words, the current discount potentially means a weakening interest in the asset, as there's more GBTC supply than demand.
Due to how the fund is structured, the shares in the trust can't be redeemed for the underlying either, meaning that the only way to cash in is to sell the shares; however, as said above, this is only possible only after six months.
GBTC's record low comes as Bitcoin struggles below the $43,000 mark, down 9% over the last month, and nearly 39% from its November all-time high of $69,044, according to CoinGecko.
Some recently-launched Bitcoin futures exchange-traded funds (ETF), such as ProShares Bitcoin Strategy ETF (BITO), have also faced hefty criticism.
Still, the asset offers investors exposure to the leading cryptocurrency without a lockup period and at lower fees.
$GBTC just closed with a ~26.5% discount..... a new low. Brutal. https://t.co/xhR50Litmn pic.twitter.com/kggc9o15zT
— James Seyffart (@JSeyff) January 18, 2022
Despite the poor performance of Grayscale's Bitcoin instrument, the firm has a plan: To Convert the GBTC into a spot Bitcoin ETF.
However, the U.S. Securities and Exchange Commission (SEC) has already delayed the firm's Bitcoin ETF application last month.
And given the hard-line approach of the Commission's chair, Gary Gensler, to investment products backed by physical Bitcoin, it seems unlikely that Grayscale will be able to execute the conversion.
If all you want for Christmas is a spot market Bitcoin ETF, time is running out. The U.S. Securities and Exchange Commission this week delayed decisions on two Bitcoin exchange-traded fund proposals, one each from asset management groups Bitwise and Grayscale. SEC commissioners now have another 45 days to review the Bitwise Bitcoin ETP Trust and Grayscale Bitcoin Trust proposals and approve or deny them. A third option is to delay the decision again. ETFs are investments that trade like stocks...
According to James Seyffart, a Bloomberg Intelligence ETF analyst, another option for Grayscale to close the gap between the underlying value of Bitcoin and the market price of GBTC could be to lower the fees and offer a redemption program.
As an extreme measure, he also suggested an option of closing the fund for good, returning the funds to investors.
However, this "would be quite bad for BTC," he said, adding that he doesn't think such a scenario is possible in the near future as Grayscale will do everything they can to get a Bitcoin ETF approved.
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