Grayscale’s Bitcoin Trust (GBTC), the world’s largest publicly traded bitcoin fund, has seen its discount widen to near record highs.
GBTC’s discount to net asset value (NAV) reached its lowest level since Dec. 29 on Monday, according to data from TradeBlock. This comes as the Financial Times reported last week that Digital Currency Group (DCG) started selling holdings in several investment vehicles run by Grayscale at a steep discount, according to U.S. securities filings.
The discount has been widening since the report was published on Feb. 7, when the discount was at 43%.
The shares are currently trading at a 47% discount to NAV, the widest discount since late December 2022, when the discount hit a record 49%. The discount initially plummeted after news of Genesis’ and DCG’s exposure to disgraced crypto exchange FTX.
Grayscale and CoinDesk share the same parent company, Digital Currency Group.
“There has been a significant surge in the price of bitcoin recently, which, combined with increasing regulation, has forced Grayscale to somewhat decouple GBTC from the price of bitcoin, which may have undermined the value of GBTC,” said Sheraz Ahmed, managing partner at Storm Partners.
Bitcoin was up 40% in January, but has since retreated slightly, losing 9% for the month to date.
Ahmed noted that “Grayscale is fighting a battle on many fronts with some of the most influential minds in crypto,” but expects “the bitcoin trust to find calmer waters.”
“However,” he added, “nobody saw the disaster of FTX before it was too late. The fall of Grayscale could have a similar impact.”
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.