Connect with us
Active Currencies 14553
Market Cap $2,671,872,020,038.83
Bitcoin Share 49.77%
24h Market Cap Change $-0.42

Grayscale Bitcoin Trust sees record discount as BTC plummets on the charts

2min Read
Grayscale Bitcoin Trust sees record discount as BTC plummets on the charts

Share this article

Grayscale Bitcoin Trust (GBTC), the world’s largest institutional Bitcoin fund, was recently at the end of its worst performance since inception in 2013. 

On 9 November, GBTC closed at $8.76 – A record discount of 41%. The primary reason for the poor performance of this investment product is the performance of the very crypto it tracks i.e. Bitcoin.

Discount to NAV at record low

The flagship cryptocurrency has lost more than 22% of its value over the past week. While the wider crypto-market hasn’t been doing too well recently, this decline in BTC’s price can be attributed to the events that transpired in FTX. In fact, many believe that the repercussions of FTX’s liquidity crisis could be bigger than the ones that came after LUNA’s fall.

Bitcoin, at press time, was trading at $16,521, down by more than 5% over the last 24 hours.

As a direct result of Bitcoin’s decline on the chart, GBTC’s discount to net asset value (NAV) saw a negative hike of 11.4% between 7 November and 9 November. In fact, data from YCHARTS revealed that the discount or premium to NAV went from -36.70% to -40.90% – The lowest it has ever been. 

The sustained widening of the GBTC discount is indicative of decreasing institutional interest in Bitcoin and demand for products that provide exposure to the crypto. 

GBTC’s press time price of $8.76 seemed to be a far cry from its all time high of $56.70 in February 2021. Worth noting, however, that the price has been on a steady decline since November 2021 when it was at $51.47. 

The ETF tussle with the SEC

Grayscale Investments has been trying for more than a year to get its Bitcoin Trust converted into a spot Bitcoin Exchange Traded Fund (ETF). One of the core problems of GBTC is that it currently doesn’t allow conversion rights.

In case of an ETF, market makers can create or redeem shares which helps to ensure minimal price discrepancy when compared to the underlying asset. 

This is one of the driving factors behind Grayscale’s attempts to convert GBTC into an ETF. However, the SEC denied this request back in June, which led to a lawsuit challenging the regulator’s rejection. The investment firm filed its official legal brief against the SEC on 11 October. 

While the recent degradation of Grayscale’s premiums were an indirect consequence of FTX’s liquidity crisis, the investment firm has previously been associated directly with controversial companies like Three Arrows Capital. 3AC founders had partly blamed its GBTC trades for the demise of the crypto-hedge fund. 


Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.