Much of the market was shaken this week when Bitcoin plunged to $5,200, accompanied by an immediate drop in the price of the Digital Currency Trust (GBTC) from $20 to $15.00, as traders dumped shares and took profit in a series of trading.
Bitcoin has been in a state of price correction for months, with many speculators having written off the cryptocurrency as an asset and a bubble bound to pop. Meanwhile, others see the recent correction as a buying opportunity, with several traders taking to social media and Reddit to offer BTCUSD long positions in the $20 range. Price action has certainly picked up in the last day, with a notable rise in the GDAX Bitcoin Index, a rise in trading volume, and a renewed sense of optimism among the community.
The Bitcoin Investment Trust (GBTC) is a company which invests in Bitcoin, and its price has fallen over the course of the past several days. This is not unusual for a commodity like Bitcoin. However, what is unusual is that the GBTC is the only Bitcoin investment vehicle which currently offers holders exposure to Bitcoin’s price, as opposed to just Bitcoin’s price. As a result, GBTC holders have experienced the largest percentage price decline in the entire history of Bitcoin. In fact, GBTC’s price has fallen so far that it is now down to the level of the price of Bitcoin when it was at its lowest levels during the Mt. Gox collapse.. Read more about gbtc vs btc chart and let us know what you think.
As its premium over spot pricing climbs to its highest level since May, the Grayscale Bitcoin Trust (GBTC) is reflecting positive sentiment in Bitcoin (BTC).
According to data from analytics firm Bybt, the so-called Grayscale premium was -5.88 percent on Tuesday. On May 25, it was closer to zero than it has been in a long time.
The premium on the GBTC has dropped by more than 6%.
That was a week after Bitcoin started a severe price decline, which has now begun to ease this week.
Since Bitcoin’s 55 percent price drop, GBTC has been the focus of considerable speculation, with the unlocking of GBTC shares reportedly increasing selling pressure.
Given the limitations imposed on GBTC holders, such an assumption is incorrect by default, according to Cointelegraph.
Nonetheless, buying activity has returned this month, with well-known brands adding to their tranches and expanding their Bitcoin exposure.
The Grayscale premium – the difference between the trading price of GBTC and the net asset value (NAV) of its BTC assets — has risen in lockstep, returning to zero after a long period in the negative.
With the majority of the unlockings completed, the story of Bitcoin price repression has all but vanished.
Trader and analyst Nick Hellmann remarked on the recent developments, saying, “$GBTC premium has gone from -15 percent to -5 percent in 5 days.”
“If $BTC can maintain these levels and have Grayscale premiums flip positive that will add fuel to this Bitcoin fire.”GBTC premium chart. Source: Bybt
Bitcoin ETF holdings have returned to pre-crash levels.
Despite conflicting views on GBTC, Grayscale CEO Michael Sonnenshein is one person that is not bearish on any timescale.
Sonnenshein reaffirmed his intention to convert GBTC, as well as its altcoin-focused counterparts, into exchange-traded funds in the company’s recent mid-year shareholder letter (ETF).
Grayscale Bitcoin Trust (symbol: GBTC), Grayscale Ethereum Trust (symbol: ETHE), and our other investment products will be converted to ETFs, according to the letter.
While the United States has yet to approve a single Bitcoin ETF, neighboring Canada has never looked back after approving the first, the Purpose Bitcoin ETF.
Purpose’s assets under management increased to $1.1 billion Canadian dollars on Tuesday, the highest level since May 13.
Assets under management chart for Bitcoin ETFs with a specific purpose. Bybt is the source.
The momentum of Bitcoin (BTC) has been broken in the last few weeks (see chart above) as various news stories (“Bitcoin price crash live updates”) have caused a panic in the market. The reason is that BTC price reached a new all time high with a lot of crypto-investors trying to cash out and take their profits.. Read more about gbtc unlock dates and let us know what you think.
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