• Mon. May 20th, 2024

Record Breaking Discounts at Grayscale Over its Bitcoin Fund

Mar 7, 2021

Glassnode’s data regarding Grayscale Investment GBTC’s premium suggests that the premium is still sliding downward since 21st December 2020. The lowest being recorded on 4th March, 2021 on which date it went downward as -11.92%.

It has been noted by Glassnode that the discount against the premium required for Bitcoin Fund has been going at extremely low levels. It was pointed out that earlier in December 2020, the discount against premium was about 40%. But since 21st December, 2020, the discount was continuously sliding down and as of 8th March, 2021, it has gone down to -11%. This is the record-breaking rate of discount which had never before been offered to Grayscale’s customers.

Glassnode stated that the reason for such a high discount is that Grayscale’s entire attention these days is diverted towards altcoins. It has been noted by Glassnode as well as news.Bitcoin.com that the company acquired 174,000 Litecoins. It was further noted that the acquisition comprised at least 80% of the total Litecoin mined till the end of February.

Other major chunks of crypto assets acquired by Grayscale consisted of 243,000 Ethereum (Eth) – the second-largest cryptocurrency in the world. Eth acquisition was also carried out in the same period when Grayscale had bought Litecoins.

However, as per the general phenomena, discount is always considered good. But in the case of discount against GBTC’s premium, it has ignited an endless debate. In this debate, a question is being asked as to what would benefit those who were owners of such products.

According to some, the reason being that Grayscale had recently launched a purpose ETF based on Bitcoin. In order to kick-start its ETF fund, the discount has been brought further levels down, said some of the experts.

Meanwhile, Thetie.io’s CEO, Josh Frank, has suggested that the discounts will not be forever. He suggested that Grayscale’s customers would be utilizing the discounts for holding more Bitcoins within their retirement designated accounts.

But according to Frank, Grayscale would need to now allow its customers to redeem shares relating to Bitcoin. For this Grayscale would have to bring about prominent changes within its 2% annual fee structure.

Grayscale Investments is one of those companies that have known to be the biggest holder of Bitcoins. Since it is a company, fully dedicated to asset management services exclusively for crypto assets, therefore it is possessing almost all major cryptocurrencies. Interestingly, the world’s highly worth crypto accounts relating to Bitcoin and Ethereum are managed and operated by none other than Grayscale Investments.

There is the addition of Bitcoins and Ethereum on several occasions every year. This is why Grayscale Investment is also regarded as the top company amongst institutions that too have invested in Bitcoin. Companies such as Microstrategy, Tesla, Square Inc., PayPal don’t even come any close to Grayscale in terms of holding crypto assets.

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