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Chinese language Crypto Neighborhood Sad – Markets and Costs Bitcoin Information

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Following the recent decline in Bitcoin price, the latest Skew data now suggests that Grayscale’s premium rate on GBTC is below 10%. The lower rate comes just a few weeks after the premium hit 41% in late December. The GBTC premium is a measure of the extent of the difference in value between the crypto asset on the open market and the grayscale fund.

Premium on Grayscale's GBTC drops if new trust reports emerge: Chinese crypto community unhappy

The same data also shows that between the end of October 2020 and January 21 of the current year, this premium averaged 22%. However, in the seven days leading up to January 21, that rate fell to 7.3%. According to Bohdan Prylepa, CTO at Prof-it.bz, this “decline indicates the sale of shares by some investors after the vesting period ends”. This is in contrast to a rising premium, which, according to the CTO, is an indication of “high demand for GBTC”.

Declining demand for GBTC

Prylepa’s view also agrees with Justin Barlow of Thetie.io, who adds that “GBTC has traded at a premium on the underlying Bitcoin for but one day since launch.” He suggests that individual “aware of the premium may have confidence that it will continue and knowingly hold GBTC stock.

However, Barlow speculates on the reasons for the premium dropping over 40% to current levels. According to him, one of the reasons could be:

“Institutional and accredited investors who have basically arbitrage traded on the premium (shorting the underlying Bitcoin and buying GBTC) will have to close their positions (buying back Bitcoin and selling GBTC), which is putting downward pressure on the premium. “

Barlow suggests other factors as well, such as the slowdown in retail demand following the recent Bitcoin decline, as well as competition from competing products like 3iq or Osprey’s Bitcoin Trust.

Additions to the grayscale portfolio

Despite the reduced premium for GBTC and BTC’s recent slump, Grayscale has continued to report new milestones. On January 21, a few days after recording the largest single-day asset movement, the company announced that it now manages $ 25.5 billion in assets.

Additionally, it has been reported that the company may have filed for new trusts with the state of Delaware in late 2020. According to information on the state’s website, Grayscale has filed for six other trusts, including Chainlink, Tezos, Liverpeer, Decentraland and Filecoin, and Basic Attention Token.

Premium on Grayscale's GBTC drops if new trust reports emerge: Chinese crypto community unhappy

Still, reports of the new filings have raised the concern of some, China-based crypto journalist Wu explains. According to Wu, “the Chinese community is questioning the latest cryptocurrency trusts filed by DCGs Grayscale, including shitcoin BAT MANA and LPT.” In his tweet, Wu also suggests that some of the tokens mentioned could be “securities”. He ends the tweet by asking; “Is this illegally manipulating its price?”

As a report quoted by Grayscale CEO Michael Sonnenshein explains, filing a trust does not necessarily mean that the company will “bring a product to market.”

Do you think the premium on the GBTC will rise above 10% again? Please share your views in the comments below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or an invitation to submit an offer to buy or sell, or a recommendation or approval of products, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use or reliance on any content, goods or services mentioned in this article.

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