The Digital Currency Group’s flagship Grayscale Bitcoin Trust is trading around 16.52% below the Bitcoin spot price, the biggest discount since Bitcoin’s price slump in May.
The Grayscale Bitcoin Trust currently offers exposure to 0.000938223 BTC per share, an amount that trades for around $ 42.32 when the market closes on Aug. 18, based on the premium and underlying Net Asset Value at the time of writing.
Since May, Bitcoin has rallied up to $ 44,300 at the time of writing, while Grayscale has caught up more slowly. Due to the six month lock-up period on initial GBTC investments, GBTC holders will not be able to redeem their shares for some time in response to the Bitcoin market price. Hence, the product tends to trade at either a premium or a discount compared to the bitcoin it contains.
The development of a GBTC rebate breaks the popular carry trade of redeeming grayscale stocks when they reach a premium and short bitcoin futures. This was a relatively risk-free strategy when GBTC was trading at a premium.
Now, with a negative premium, the incentive to redeem GBTC shares is gone.
Right now, GBTC stocks at a discount are an elegant solution and vehicle for traditional investors or people looking to take bitcoin price risk through their bond portfolio. The learning curve for buying Bitcoin outright can seem daunting to some, and GBTC has the added benefit of a six-month compulsory drunk before stocks can be redeemed.
Grayscale Bitcoin currently manages $ 29.3 billion in assets.