Grayscale Bitcoin Premium Flips Negative as BTC Stays Below $50,000

The gap between the GBTC share price and the implied price of the underlying bitcoin has collapsed to a 4% discount from a 35% premium late last year.

AccessTimeIconFeb 26, 2021 at 8:41 p.m. UTC
Updated Sep 14, 2021 at 12:18 p.m. UTC

The largest public bitcoin trust is facing an unusual situation: Its share price is dropping faster than the underlying cryptocurrency.

  • Historically, the Grayscale Bitcoin Trust (GBTC) trades at a premium to bitcoin (BTC) itself. But that premium turned into a discount this week, with GBTC closing at a price nearly 4% lower than the market value of the underlying asset on Thursday.
  • In mid-December, GBTC shares traded at more than a 35% premium, according to data from YCharts, a reminder that price action for GBTC doesn't perfectly match bitcoin's own price action by any means.
  • NOTE: Grayscale is owned by Digital Currency Group, CoinDesk's parent company.
  • Grayscale's bitcoin trust isn't the only one trading at a discount, however. 3iQ's Canadian Bitcoin Fund (QBTC), although a smaller fund than Grayscale, was also trading at a roughly 4% discount to its underlying asset, according to market data from CryptoQuant.
  • GBTC and QBTC are trading at discounts as bitcoin itself is selling off, dropping to below $45,000 Friday afternoon before slightly recovering to above $48,000.
  • At last check, BTC was trading at $46,877, based on CoinDesk's Bitcoin Price Index, with a year-to-date gain just below 60%.
  • Analysts have speculated the shrinking premium might be due to reduced demand for bitcoin, or due to increasing competition among providers of bitcoin-focused exchange-traded products.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Investing in the Future of the Digital Economy
October 18-19 | Spring Studio, NYC