Major criticism were raised about the techniques followed by the Grayscale Bitcoin Trust, or GBTC, set up by the investor, analyst & head of product at cryptocurrency market data analysis firm Messari named ‘Qiao Wang’.
Within his earlier tweet published on 11th June, Wang added that the Grayscale’s official website, consistent with which “Grayscale Bitcoin Trust doesn’t presently operate a redemption program and might expectedly halt creations in the upcoming times.” He suggested that the absence of a redemption mechanism may result in GBTC trading at a reduction compared to total asset value, or NAV, of the fund’s assets.
Just Donating Money To Grayscale
Explaining further Wang added that when an exchange-traded fund, trades at a reduced price compared to the fund’s underlying assets, an arbitrageur can purchase the contract on an exchange and redeem it for the assets that back it.
“Without the power to redeem, you’re just donating your money to the founder of Grayscale’s founder”
Grayscale – Transforming Fastly
Earlier news makes it quite clear that the Grayscale’s crypto holdings are amassing at an outstanding pace. As reported earlier in May, Grayscale was at the time purchasing Bitcoin [BTC] one and a half times quicker than the new units were mined since the date of 11th May Bitcoin block reward halving.
Moreover, Grayscale’s director of investor relations Ray Sharif-Askary recently also revealed that the firm has also been aggressively purchasing the second largest cryptocurrency by market cap, Ethereum [ETH].