Popular Bitcoin Trust Hits New Lows and Historic Discount – GRAYSCALE BITCOIN TRUST by Grayscale Bitcoin Trust (BTC) (OTC:GBTC)
A well-known Bitcoin trust that has been an early way for investors to gain exposure to the leading cryptocurrency without opening cryptonative accounts recently hit new 52-week lows. Here’s a look at what’s going on Grayscale Bitcoin Trust GBTC.
What happened: On Friday, shares of Grayscale Bitcoin Trust hit new 52-week lows of $11.03. The fall comes during the crypto bear market and as Bitcoin BTC/USD trading above their annual lows.
The Grayscale Bitcoin Trust launched in 2013 as one of the first major ways for investors to gain exposure to Bitcoin without having to open a cryptocurrency wallet.
“Grayscale Bitcoin Trust is solely and passively invested in BTC, enabling investors to gain exposure to BTC in the form of a security while avoiding the challenges of purchasing, storing and holding BTC directly,” the company’s website states .
Grayscale Bitcoin Trust has $11.9 billion in assets under management.
The fund holds around 3% of the total Bitcoin supply and is among the largest holders of the leading cryptocurrency in the world.
Related Link: How to Buy Bitcoin
Why it’s important: Grayscale Bitcoin Trust is one of the most popular stocks traded over the counter (OTC). In the month of July, the stock was second in volume among OTC stocks with a volume of 1.17 billion dollars. The stock was the highest volume OTC traded stock in the month of June with $2.6 billion in volume.
The fund charges an annual management fee of 2%, which customers have been paying for years for the possibility of easy use and exposure. As cryptocurrency trading became more mainstream and readily available, more investors flocked to buy Bitcoin on their own.
As of Friday, shares in the Bitcoin trust are also trading at a 35% discount to the value of the Bitcoin they hold, marking the biggest discount for the fund since its launch. Investors who believe Bitcoin will rise in value can see the trust as a hedge, where even with the 2% fee, the holdings trade at a discount. The discount comes as a reversal from previous years when investors were willing to pay a premium to Bitcoin’s value due to the mechanics of trust and ease of trading.
Cryptocurrency platform bankruptcies have likely put Grayscale Bitcoin Trust back into focus. The fund remains a popular investment by institutional investors who want to bet on Bitcoin without risk and regulatory concerns.
The Grayscale Bitcoin Trust is also a large holding of Ark Innovation Next Generation Internet ETF ARKW from Cathie Wood and Ark Invest.
Trust has increased by over 12,000% since launch, according to the company’s website.
GBTC Price Action: Grayscale Bitcoin Trust hit a 52-week low of $11.03 on Friday. Shares rose 1.74% to $11.39 on Monday, versus a 52-week range of $11.03 to $55.05. Shares are down 67% so far in 2022.
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