Grayscale Bitcoin Trust closes with 41% premium loss amid FTX slump
On November 9, GBTC closed at a record 41% discount with a share price of $8.76.< /p>
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Following the FTX bank run, which accelerated on November 7, the price of Bitcoin (BTC) began to fall and, at the time of writing, was down 21% in five days. Among the casualties of the rapid market crash is the world's largest institutional Bitcoin fund, the Grayscale Bitcoin Trust (GBTC).
On November 9, GBTC closed at a record 41% discount, with a price per share of $8.76. Overall, GBTC has been steadily declining for almost a year since peaking at $51.47 per share on Nov 12, 2021.
A structural problem with GBTC is that it is an investment fund whose shares are not freely created and do not offer a buyback program. This inefficiency creates significant price deviations from the fund's underlying bitcoin holdings.
This is why Grayscale reportedly attempted to convert GBTC into an Exchange Traded Fund (ETF), which allows the market maker to create and redeem shares, ensuring that the premium or rebate is , mostly minimal.< /p>
The company has been awaiting a final decision from the Securities Exchange Commission (SEC) since filing its application in October 2021. On June 29, the SEC formally denied Grayscale's application to convert GBTC to a spot Bitcoin ETF. Grayscale then decided to go to court. On October 11, he filed the opening legal brief challenging the SEC's decision.
The current market crisis began on November 2, after reports of a leaked balance sheet of Sam Bankman-Fried-founded trading firm Alameda Research, suggesting the
On November 9, GBTC closed at a record 41% discount with a share price of $8.76.< /p>
New
Following the FTX bank run, which accelerated on November 7, the price of Bitcoin (BTC) began to fall and, at the time of writing, was down 21% in five days. Among the casualties of the rapid market crash is the world's largest institutional Bitcoin fund, the Grayscale Bitcoin Trust (GBTC).
On November 9, GBTC closed at a record 41% discount, with a price per share of $8.76. Overall, GBTC has been steadily declining for almost a year since peaking at $51.47 per share on Nov 12, 2021.
A structural problem with GBTC is that it is an investment fund whose shares are not freely created and do not offer a buyback program. This inefficiency creates significant price deviations from the fund's underlying bitcoin holdings.
This is why Grayscale reportedly attempted to convert GBTC into an Exchange Traded Fund (ETF), which allows the market maker to create and redeem shares, ensuring that the premium or rebate is , mostly minimal.< /p>
The company has been awaiting a final decision from the Securities Exchange Commission (SEC) since filing its application in October 2021. On June 29, the SEC formally denied Grayscale's application to convert GBTC to a spot Bitcoin ETF. Grayscale then decided to go to court. On October 11, he filed the opening legal brief challenging the SEC's decision.
The current market crisis began on November 2, after reports of a leaked balance sheet of Sam Bankman-Fried-founded trading firm Alameda Research, suggesting the
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