GBTC Shares Are Dropping Much Faster Than Crypto Market Fall.
2021-02-27 | Big Bob
![GBTC Shares Are Dropping Much Faster Than Crypto Market Fall.]()
The leading public bitcoin trust 'GBTC' is facing a serious situation: Its share price is dropping faster than the underlying crypto asset.
Just a few days earlier, the GBTC [Grayscale Bitcoin Trust] trades at a premium to Bitcoin [
BTC] itself. But that premium
became a reduction in the week, with GBTC closing at a price nearly 4%
less than the
market price of the underlying asset earlier on Thursday.
Within mid-December, GBTC shares traded at
over a 35% premium,
consistent with data from
YCharts, a reminder that price action for GBTC doesn't perfectly match bitcoin's own price action by any means.
Grayscale's bitcoin trust
is not solely trading at
a reduction, however. 3iQ's Canadian Bitcoin Fund [QBTC], although a smaller fund than Grayscale, was also trading at a roughly 4% discount to its underlying asset,
consistent with market data from
CryptoQuant.
GBTC and QBTC are trading at discounts as bitcoin itself is selling off, dropping to below $45k Friday afternoon before slightly recovering to a price over $48k.
At last check, Bitcoin [BTC] was trading at $46,877 USD,
as per CoinMarketCap’s Bitcoin
price level, with a year-to-date gain
slightly below 60%.
Analysts have predicted the shrinking premium
could be due to reduced demand for bitcoin, or due to the increasing competition among providers of bitcoin-focused ETPs [Exchange-Traded Products].
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