Grayscale GBTC Sees a -38% Slump in Negative Premium Rate

Grayscale Bitcoin Trust (GBTC) has witnessed a drop in its negative premium rate. At present, the rate is nearly -38.02%. The platform’s rally at the start of this year has outperformed its core BTC holdings in Bitcoin (BTC). Hence, its discount value is coming closer to the net asset value (NAV). As per OKLink’s updated statistics, the negative premium rate of top coins is as follows.

GBTC Witnesses an 8-Week Low in Its Discount

The amount of the trust’s assets under management (AUM) is above the $10B mark. The NAV of the trust is approximately 38% lower. This amount is considered to be the narrowest during the recent 8 weeks. At the 2023’s start, the discount was 45%. Before that, In December 2022, the discount reached the 50% spot.

The discount to NAV commenced the previous year near the 20% zone. Even before that, in 2021, GBTC was normally used to carry out trading at a considerably bigger premium to the net asset value. The discount compressing of GBTC may have resulted from the thing that traders have reportedly been betting on the trust’s full unwind. Other than that, the compulsion for Grayscale to offer complete/fractional redemptions may also be a cause, as mentioned by Fundstrat’s chief of digital assets-related strategy “Sean Farell.”

US Securities Regulator Dismisses Grayscale’s Proposal to Transform GBTC into an ETF

Nonetheless, the executive mentioned, it is very difficult to make any hasty results as the volumes are significantly decreased while the market is subsequently seeing illiquidity. Grayscale had requested to transform the GBTC fund into an ETF (or exchange-traded fund).

As per the platform, this would offer an opportunity to the traders. It specified that the traders can carry out arbitrage to get profit. Nonetheless, the respective proposal was rejected by the US Securities and Exchange Commission in the early days of 2023.