The largest Bitcoin investment vehicle, the Grayscale Bitcoin Trust (GBTC), is now trading at its biggest ever discount to the spot market.
Data from on-chain analytics resource Coinglass shows GBTC shares down 34% versus BTC/USD on major exchanges as of June 17.
GBTC suffers in market downturn
Amid continued turmoil in DeFi spilling over to infect the crypto market, conditions have deteriorated for investors big and small.
The latest figures now show that institutions have definitively failed to avoid the contagion, and the already underperforming GBTC has hit new lows.
The GBTC premium, long a misnomer due to the fund’s shares in fact costing less than Bitcoin itself, is circling its lowest values in history. On June 17, these traded at 34.2% cheaper than the Bitcoin spot price (also known as net asset value or NAV).
A sharp downturn accompanied a similar dip on spot markets as BTC/USD retested $20,000 twice.
As Grayscale pursues United States regulators for permission to convert GBTC to a Bitcoin spot price exchange-traded fund (ETF), conditions continue to look unfavorable for crypto institutional products amid heightened government attention in the wake of the Terra and Celsius meltdowns.
While the firm remains buoyant on the outlook, GBTC’s performance has not escaped commentators, who point the finger at regulators for what they see as inaccurate risk assessment.
Bitcoin spot ETFs remain outlawed in the U.S. due to investor protection concerns, allowing countries such as Canada and Australia to gain first-mover advantage.
Shares of $GBTC are now 66.9% lower than they were at the peak of 2017 despite $BTC trading 5% higher.
Make sure to thank Mr. Gensler for the protection everyone. pic.twitter.com/Q1cAw8hBtR
— Dylan LeClair (@DylanLeClair_) June 16, 2022
“Without ETF approval GBTC may go to -100% premium to NAV,” Vijay Boyapati joked this week.
Hayes names D-Day for crypto market bottom
This situation has not been helped by reported liquidity problems at multiple crypto funds with exposure to those already facing severe losses. Embattled Three Arrows Capital (known as 3AC), for example, is the largest GBTC holder with over 38.8 million shares.
Related: These 3 metrics suggest the Bitcoin price crash is not over
As 3AC fails to meet margin call requirements this week, a marked gap is opening between GBTC and its competition. The ProShares Bitcoin Strategy ETF (BITO), the first…
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