Grayscale BTC Trust Hit 20% Discount As It Files For ETF Conversion

Grayscale BTC trust hit 20% discount on the asset and the company is now trying to pivot to a Bitcoin ETF so let’s read more in our latest Bitcoin news.

There’s even more frustration for the Grayscale BTC trust investors as the main product is now suffering from a 20.53% discount as per the data from Glassnode. The discount means that the market price of GBTC shares is more than 20 percent lower than the net asset value and according to the website, each GBTC share amounts to 0.
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00093509 BTC. The BTC per share was worth $57.44 at a market close on Monday and GBTC is now trading at around $45.65.

10/18/21 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.

Total AUM: $53.5 billion$BTC $BAT $BCH $LINK $MANA $ETH $ETC $FIL $ZEN $LTC $LPT $XLM $ZEC $UNI $AAVE $COMP $CRV $MKR $SUSHI $SNX $YFI $UMA $BNT $ADA $SOL pic.twitter.com/FqrPF9LKI7

— Grayscale (@Grayscale) October 18, 2021

While the Grayscale Bitcoin trust has a few similar elements with a Bitcoin ETF, it is giving investors exposure to BTC without the need to physically buy or hold the asset with the two being distinct products. GBTC enabled investors to trade the shares in a trust holding bigger pools of BTC while a Bitcoin ETF offers an opportunity to invest the funds that track the price of the underlying asset. Another huge difference is that the GBTC shares are created by Grayscale as the operator of the trust and can be redeemed only for a set period of time. The Bitcoin ETF however allows for the creation and redemption of the shares at will which means that the premium or discount is unlikely if there’s enough liquidity.

Some of the bigger investors include Morgan Stanley that is the biggest investment bank in the US, Bill Miller, and Cathie Wood’s Ark Invest. GBTC shares traded at a hefty premium relative to the price of BTC which changed in February when the GBTC shares turned negative for the first time since the fund inception in 2013. Since then, the GBTC was trading at a steep discount and resulted in losses for the existing investors because of the six-month lock-up for the initial investment. Grayscale held $53.5 billion in assets under management with about $39.7 billion or about 73% of all funds allocated to GBTC.

This is a historic and important moment for #Bitcoin and the entire #digitalcurrency ecosystem.

— Jennifer Rosenthal (@jenn_rosenthal) October 18, 2021

The Grayscale BTC trust hit 20% and one way to reverse it is that it trades closer to its net asset value and to convert GBTC into a physical Bitcoin ETF. The company has made these intentions clear today after filing a conversion application today. The New York-based company revealed these plans in April with more reports on the matter that came over the past few days. Grayscale’s director of communication confirmed that the company is eyeing the move as soon as there’s more information from the SEC.