- Bitcoin price decline has triggered an 80 percent crash in Grayscale’s shares.
- Investors say Grayscale’s downturn is due to its exorbitant expense fees.
The current crypto market bloodbath is beginning to have adverse effects on some bitcoin-linked businesses in the cryptoverse. According to a Bloomberg report on October 2, 2018,, Grayscale Bitcoin Investment Trust, which is the only BTC investment trust in the United States, has seen its shares lose a whopping 80 percent since bitcoin last hit the moon in 2017.
Grayscale Bitcoin Investment Trust (GBTC) Feeling the Crypto Burn
This is certainly not the best times for Grayscale Bitcoin Investment Trust (GBTC) – the only bitcoin-based investment trust in the U.S, as it’s the ongoing cryptocurrency markets downturn has succeeded in crashing GBTC’s share price by 80 percent since late last year when the price of bitcoin nearly hit $20K, according to Bloomberg.
Founded in 2013, Grayscale Bitcoin Investment tracks the price of bitcoin and builds bitcoin and blockchain businesses.
While the world’s flagship cryptocurrency has dropped more than 50 percent since its 2017 bull run, some of Grayscale’s investors have however said that the company’s high expense fees have also contributed to its share price slump.
“Expense ratios are insane for these funds, and the current BTC price is created more problems for GBTC,” Naeem Aslam, the chief market analyst at TF Global Markets U.K. Ltd., told Bloomberg.
Compared to the average equity mutual fund expense ratio which charges investors less than 1 percent as at last year; it could be said that GBTC’s expense fees are quite high, as the trust charges investors 2 percent of every invested amount.
While crypto enthusiasts across the globe remain hopeful that the bulls will return soon, as the price of bitcoin has gained some stability at the $6500 price region, with several institutional investors joining the crypto bandwagon, it, however, remains to be seen when the burgeoning digital assets will moon again.
As reported by Blockchain Reporter on September 20, 2018, Bakkt, the cryptocurrency exchange created by Intercontinental Exchange (ICE), in collaboration with Starbucks and Microsoft joined forces with JP Morgan, to offer Bitcoin trading services to institutional investors.