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GBTC Elevator to Hell Sees Bitcoin Spot Price Close to 100% Premium

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bitcoin (BTCThe investment vehicle, Grayscale Bitcoin Trust (GBTC), is trading at nearly 50% below the price of BTC in the spot markets.

Data from the on-chain analytics platform Coinglass It confirms that on December 8, GBTC shares hit a new record high of -47.2% against BTC/USD.

GBTC problems are piling up after FTX

In the latest bout of nerves to hit the bitcoin industry since the fall of FTX, the price of GBTC is close to half the price against that of Bitcoin.

The largest institutional investment vehicle in bitcoin, with Assets worth about $10 billionGBTC has faced many challenges in recent years.

Its share price previously traded higher than BTC/USD, resulting in a so-called “GBTC premium.” Since 2021, however, that premium has turned negative, but the resulting “discount” has done little to attract additional institutional interest.

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As Cointelegraph reported, more than a few The main exceptions Like ARK Invest, GBTC is in a weak position as an operator of Grayscale, part of Digital Currency Group (DCG), is trying to turn it into an exchange-traded fund (ETF) – prosecution US regulators are getting in the way.

Amid the legal battle, FTX has raised liquidity issues elsewhere in the DCG empire, and this has led to suspicions about Grayscale and GBTC. greyscale back off To show evidence of its BTC reserves last month, despite assurances by custodian Coinbase that its assets are safe, added to the tensions.

Bitfinex’ed commented, “Grayscale is in some real trouble if they have to reveal the whereabouts of all the GBTC-enabled bitcoins” Wrote In part of a Twitter discussion on the subject this week.

This week, things got worse, like Grayscale He faced a lawsuit From investor Fir Tree regarding what it calls “shareholder unfriendly actions.”

GBTC premium vs asset holdings vs BTC/USD chart. Source: Coinglass

Meanwhile, public interest in crypto ETFs has declined this year, separate data She suggests.

Woo: “Partly bullish” issues for Bitcoin

However, the GBTC premium, having barely recovered from previous record lows, sank further against Bitcoin, which is known to correlate with net asset value (NAV).

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Related: Why did the bitcoin price drop today?

“GBTC USD discount on bitcoin NAV is on the express elevator to hell. => Sentiment = bearish,” Timothy Peterson, investment director at Cane Island Alternative Advisors, commented. Summarization.

Others lamented the slow pace of change in the United States as fanning the fire.

“Much of the pain could have been avoided this year if GBTC had been converted into a SEC ETF to keep everyone safe!” Investor and entrepreneur Alistair Milne reactionechoing popular sentiment from recent weeks.

Meanwhile, Willy Woo, creator of stats resource Woobull, argued that the impact of fading GBTC exposure was not necessarily a direct negative for BTC price strength.

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GBTC/DCG/Genesis fears a bearish cloud is hanging in the market. But part of the impact was “unexpectedly” bullish for Bitcoin. chirp on December 5th.

“37.5% of people who sold GBTC bought spot Bitcoin to take custody. Selling GBTC does not affect the price of Bitcoin, and buying spot affects the price of Bitcoin.”

An additional Twitter survey questioned platform users who hold GBTC by default about their motives for selling.

Willy Woo Twitter poll (screenshot). Source: Willy Woo / Twitter

The views, ideas and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.