The premium price of the Grayscale Bitcoin Trust (GBTC), the hugely popular bitcoin (BTC) fund for US institutional investors, plunges to a record low of -18.92%. This is evident from data from YCharts on April 22. This means that the price of GBTC shares is now almost 20% below net asset value (NAV), the underlying asset.
GBTC’s premium has now been negative for two months in a row. Early this month, investment firm Marlton sent another open letter to Grayscale demanding immediate action. The negative value would lead to large losses among investors, according to the company.
The reason for this negative premium price is that Grayscale no longer accepts new investors, which has halted the influx of new money. Competition in the market has also increased with the arrival of the first North American bitcoin exchange-traded funds (ETFs) in Canada. Grayscale plans to launch a bitcoin ETF of its own as well.
Yesterday it was revealed that Grayscale has purchased no less than $ 1 billion in crypto for its funds. Despite this, total value under management, or assets under management (AUM), had fallen from nearly $ 50 billion to $ 45 billion.
That was before the April 23rd crypto massacre. Today the bitcoin price dips below $ 50,000 and with that the AUM of Grayscale will also have fallen further.