At the time BlockFi's cryptocurrency lending wing and the Three Arrows Capital arbitrage desk held over 5% of the outstanding shares according to the U.S. Securities and Exchange Commission rules that require this disclosure. What does this mean? As the latest Glassnode data shows, the GBTC was trading at a record low discount of -11.92% on March 4, 2021. Grayscale Investments stopped selling GBTC shares after February 2021. The answer to why is simple on one hand, it is that GBTC holders are hitting the sell button more than the buy . It seems a simple arbitrage opportunity is present. These levels had not been seen since the last week of March. GBTC discounts are here to stay, big cardholders have a long wait for the premium to return . A spot ETF is not approved yet but GBTC is filing to convert. Later, he predicts that some hedge funds will want to leverage the arbitrage opportunity between Bitcoin's price in the spot market and the GBTC discount. The Grayscale Discount is an entirely new phenonema. At least $5B will have to be unwound off $GBTC which may take BTC prices back to the $29k levels Some Bitcoin-denominated investors tried to arbitrage through GBTC, but now, as the net asset value discount continues to get worse and worse, their plans have been disrupted. This potential impact is relevant even if most of the volume is closing a premium arbitrage trade by purchasing a BTC futures contract while selling the GBTC shares. It now gradually sells BTC to fund expenses. On the other hand, many crypto funds try to take advantage of the huge premium of GBTC to carry out a large number of arbitrage transactions, and they will be short to . Grayscale's Bitcoin Trust (GBTC) has been a very common ways for institutions gets get exposure to #Bitcoin without having to think about custody or owning the underlying asset. After a six month lockup, the investor who received these shares may sell them on the open market. Grayscale Investments' Grayscale Bitcoin Trust (GBTC) has been under the heat for the last couple of weeks as it traded below the Bitcoin equivalent for each share. The exchange rate is now at a 20% price discount compared to its bitcoin holdings, a fact that has . Grayscale Fund Touts ETF Conversion as Price Discount Issue Solution. Grayscale's GBTC and ETHE premiums have risen to two-month highs. Understanding the GBTC Discount. The unlocking is due by around mid-July. Meanwhile, the GBTC discount declined by 14.4%, from negative 18.2% to negative 3.8%. This will mean that its current 15% market value discount to its NAV will disappear. March 10, 2021 admin. As can be seen from the chart above, GBTC, which has been trading at a substantial premium to its NAV before 2021, is now trading at a 21% discount. However, traders are selling GBTC in a panic creating a large negative GBTC premium (a GBTC discount). It now gradually sells BTC to fund expenses. The discount on GBTC cannot be easily arbitraged away by buying GBTC and redeeming for the underlying GBTC, because it is set up as a trust and not an ETF. -> Hedge Funds and Arbitrage. On Feb. 27, this situation changed abruptly as the GBTC premium turned into a discount. View and export this data back to 2013. It's currently trading as a steep discount to NAV (almost -12%). Later, he predicts that some hedge funds will want to leverage the arbitrage opportunity between Bitcoin's price in the spot market and the GBTC discount. The GBTC arbitrage only works if its units trade at a premium in the secondary market. This scenario would be much more likely if GBTC is converted into an ETF, according to Grayscale CEO Michael Sonnenshein. The Grayscale Bitcoin Trust, a popular Bitcoin fund, trades at a significant discount to its net asset value. The GBTC arbitrage only works if its units trade at a premium in the secondary market. The Grayscale premium turned into a discount this February. Founded by Barry Silbert, Grayscale is the largest digital asset manager, and provides insight on market and exposure to investment. As this event is to take place, a major question has been raised and everyone . Upgrade now. The GBTC discount could represent an opportunity to get exposure to Bitcoin on the cheap, but such a bet would assume that the discrepancy between GBTC's NAV and market price would be closed through arbitrage. Thus, they could short BTC and purchase GBTC with a higher discount. This is unlike in 2020 where GBTC has typically been trading at a premium. The firm has picked up over $1.6 billion worth of Bitcoin in the past year. During this period, the GBTC discount will increase to 25%, Mashinsky said. 4. As reported by U.Today, the Grayscale Bitcoin Trust recently added 19,879 BTC (close to $182 mln at press time). The sharp fall in the premium suggests that some large investors might be cashing out their gains or just arbitraging premiums away. MSTR and miners are another way to get leveraged exposure. Grayscale Bitcoin Trust's ( GBTC) share unlocks come to a close at 16.24k BTC on 18 July - the biggest unlock to happen this month. The trust has been trading at a discount to its net asset value (NAV) since February. A trust is one way only, accredited investors can buy into the fund at NAV, get equivalent GBTC, and after a lockup period of 6 months, sell them on the open market if they wish to. According to data from Glassnode, fund inflows to GBTC were down by 85%.Glassnode shows that in February the fund took in 6,599.9 BTC compared to 41,568 BTC in January. The item permits institutional and certified financiers to bank on increasing (or falling) Bitcoin costs and holds a percentage of BTC per "share," which are traded on the free . Bitcoin ( BTC) is facing difficulty breaching the $40,000 mark again after briefly crossing it on May 26. This increase in released GBTC equates to 2 billion at the current price of 56,800 BTC, which could increase the pressure on GBTC stock. Investors are now paying $0.79 to hold $1 worth of bitcoin. This increase in "unlocked" GBTC represents $2 billion at the current $56,800 BTC price and potentially adds pressure to the GBTC shares. The premiums for ETHE jumped from negative 11.3% to 12.3%. The GBTC and ETHE premium arbitrage trade has recently become very topical. The Grayscale Bitcoin Trust (GBTC) product is trading at a nearly 12% discount — its highest fall in history, according to data compiled by The Block. Regular investors simply don't have the required $50,000 to unlock the GBTC discounts that make the trade possible. How to deal with GBTC discount? Once converted the current discount should arbitrage away and be a free 14% gain if you're a long term holder. GBTC at a discount . Source:Yahoo Charts GBTC is trading at a discount of 10-15% all this time since February. Both products, issued by Grayscale, have traded at a consistent premium over NAV (TradeBlock XBX and ETX Index) since. GBTC has been trading at an 8-12% discount to NAV and this gap will close significantly to prevent an arbitrage between the price of the Grayscale BTC ETF and the spot price of BTC. The fund was established in 2013, but I can only track its NAV from May 2015 when it became exchange-traded. "The ability to buy GBTC and short futures and get exposure to bitcoin with about a 25% price advantage should continue to attract arbitrage, reduce volatility and narrow spreads," Bloomberg's McGlone said on Oct. 20, when the discount was over 20% and the six-month futures contract was drawing a premium of 4%. GBTC Discount or Premium to NAV: -21.27% for Jan. 3, 2022. So when Greyscale wants to solve the discount problem, releasing redemptions is the most effective way, and arbitrageurs will quickly flatten the spread between GBTC and BTC. Grayscale halts GBTC inflow after record 15% discount. Most institutional investors participate in crypto-asset markets through investment funds like Grayscale Investment's closed-end trusts. While the world's largest cryptocurrency has gained roughly 25% over the past month, GBTC is 14% higher in that period. An ETF structure, with accessible redemptions, unlike . Thus, they could short BTC and purchase GBTC with a higher discount. This was a significant change since GBTC has traded at a premium throughout its existence. Said Dorman: "Buying GBTC for that 17% discount is the equivalent of buying a 0% coupon, two-year bond at 83 cents on the dollar (not including Grayscale's 2% management fee, which makes it . Thus, the. As OKEx Insights explained in a previous article, the long-time positive premium for GBTC has created an arbitrage opportunity between the primary and secondary markets — attracting many institutions to a market-neutral strategy. Grayscale Bitcoin Trust discount to NAV hits record as bitcoin retreats 2021/04/23 - 14:14 Grayscale Bitcoin Trust's ([[GBTC]] +1.9%) discount to NAV widens to almost 19% at April 22, its all-time biggest discount, according to tracker YCharts.That compares with its 52-week high of a 40% premium on Dec. 21. A drop in Grayscale's Bitcoin Trust (GBTC) premiums could spark a bullish rally to $100,000, says a prominent industry analyst. Shares of GBTC have spent a majority of the last six weeks trading negative to NAV, presenting a challenge to investors and funds that implemented the infamous arbitrage trade. GBTC is not an ETF it's a close end trust. . The discount recently dipped to as much as 20.5%. GBTC's price sank as much as 11.6% below its net-asset value last week, its largest-ever discount, according to data compiled by Bloomberg. And arbitrage is meant to be risk-free - this would simply be a relative value trade. GBTC persists in a discount phase with a relatively low scope of trades at a premium. Earlier this week, Grayscale indicated it added $283 million in assets to GBTC.. 100% of my friends who had GBTC as a crypto keeping method sold eventually over the last few days and put everything it in the new ETF. While GBTC and ETHE are available to (accredited) retail investors, Grayscale's data shows 84 percent of inflows coming from institutional sources, particularly hedge funds. You can check the premium here before you buy. GBTC — Grayscale's flagship fund with nearly $38 billion in Bitcoin — has historically traded at a premium, allowing accredited investors a profitable arbitrage opportunity.. The idea behind converting GBTC to an ETF is that it will equalize the discount and bring the market value of GBTC to the net asset value by allowing GBTC or its market maker to buy up shares on. GBTC makes bull markets. Grayscale is the dominant crypto fund manager with over $36 billion assets under . The cryptocurrency is currently exchanging hands at around the $36,000 mark, which is a 44% drop from its all-time high of $64,889 on April 14. The $32bn Grayscale Bitcoin Trust (GBTC), which owns 3.5 per cent of the world's bitcoin, currently trades 15 per cent below the value of its underlying assets. At the time BlockFi's cryptocurrency lending wing and the Three Arrows Capital arbitrage desk held over 5% of the outstanding shares according to the U.S. Securities and Exchange Commission rules that require this disclosure. It is notable that GBTC is still trading at a steep discount to NAV, despite attempts from Grayscale to get the shares back to trading at a premium. Inflows into GBTC have flatlined. . As mentioned above, the poor arbitrage mechanism is the root cause of the spread. The persistent discount in GBTC means that traders are unable to arbitrage its price against that of Bitcoin, one . Source: ByBt.com. The Grayscale Bitcoin Trust (GBTC) is trading at a reasonably high discount rate compared to its otherwise high premiums, information from several sources programs. Discord https://lnkd.in/dv-2tJT The GBTC and ETHE premium arbitrage trade has recently become very topical. This premium has now evaporated, as retail demand has flowed to new, cheaper products, like Canada's pair of . The fact that the Barry Silbert-helmed asset management firm was purchasing Bitcoin three times faster than new coins were entering into circulation was perceived as an uber-bullish sign of growing institutional demand. The instrument trades on over-the-counter markets and is by far the largest listed cryptocurrency asset. As publicly traded trusts that report to the U.S. Securities and Exchange Commission, they relieve investors of concerns about storage, custody and security of their holdings. The product is now trading at a deep 16.5% discount to NAV, according to YCharts. GBTC charges a ton of management fee and with the new ETF theres pretty much 0 reason to choose closed end funds. In theory, one could buy GBTC at a discount, sell the long-term futures at a premium and wait for the spread to collapse. The current premium of GBTC stands at minus 11.59%. Earlier this week, Grayscale indicated it added $283 million in assets to GBTC.. That figure shrank to 3.22% on Tuesday as Bitcoin prices. BlockFi itself has purchased significant portions of GBTC shares in the past, but now the new negative premium not only eliminates the arbitrage opportunity, it makes the shares themselves a shaky investment, especially in light of Grayscale charging an annual 2% fee to obtain and package the underlying Bitcoin. This scenario would be much more likely if GBTC is converted into an ETF, according to Grayscale CEO Michael Sonnenshein. The steps are. Current discounts can be lucrative for institutions, but trading with a discount for months defeats the purpose of arbitrage, meaning institutions will end up leaving the Grayscale model anyway. GBTC announced that it will change its current trust structure into an ETF (as soon as gvmt approval is granted) that will carry far lower mgmt fees than currently. Because GBTC is . The leading catalyst for the sudden rise is the recent launch of . However, that premium flipped to a discount on February 26, reaching a record of 20% on April 22. This potential impact is relevant even if most of the volume is closing a premium arbitrage trade by purchasing a BTC futures contract while selling the GBTC shares. GBTC shares are consistently bought and sold at a premium to their corresponding amount of BTC (typically somewhere between 20 and 35%). GBTC is roughly up 20% so far in 2021, while Bitcoin has surged nearly 73% over that span. Both products, issued by Grayscale, have traded at a consistent premium over NAV (TradeBlock XBX and ETX Index) since inception. Currently, GBTC trades at a 30% premium to NAV, and ETHE trades at a 850% premium to NAV. Other big holders in GBTC include Three Arrows Capital Ltd., Horizon Kinetics LLC and Churchill Management Corp., Bloomberg data show. Historical Discount or Premium to NAV Data. GBTC premium stays negative, suggests Bitcoin price sentiment still low? The discount has deepened even as Barry Silbert's Digital Currency Group Inc., which controls Grayscale . GBTC has historically traded at a premium. This potential impact is relevant even if the bulk of the volume is conducting premium arbitrage trading by simultaneously buying BTC futures and selling GBTC shares. Bitcoin (BTC) is holding up well and trading at support levels after making highs a few weeks back. This potential impact is relevant even if most of the volume is closing a premium arbitrage trade by purchasing a BTC futures contract while selling the GBTC shares. Read why you should buy GBTC stock. As a result, Grayscale played an important . The chief investment officer noted that the real GBTC arbitrage trade strategy is for investors with deep pockets. This increase in 'unlocked' GBTC represents $1.83 billion at the current $50,900 BTC price and potentially adds pressure to the GBTC shares. Thus, the biggest buyer vanished and a lot of that was the neutral arbitrage trade." When GBTC's premium over NAV turned into a discount in late February 2021, the neutral arbitrage trade dried up and Grayscale stopped buying. Throughout most of its history, GBTC was trading at a premium to its net asset value (NAV), but started trading at a discount in February this year. This premium has now evaporated, as retail demand has flowed to new, cheaper products, like Canada's pair of . 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