As the value of the underlying asset kept falling in value, the Grayscale Bitcoin Trust (GBTC) closed at a record -41% discount. The indicator represents a premium above or a discount from the GBTC fund’s net asset value (NAV).
Investors can purchase shares of the fund for -40% off the value of the underlying asset. However, the bears are currently destroying the markets, and anything cryptocurrency-related is being sold off.
According to Investopedia, Net Asset Worth is calculated by dividing the total number of outstanding shares by the net value of an investment fund’s assets less its liabilities. The share price of funds (ETFs and mutual funds) listed with the U.S. Securities and Exchange Commission (SEC) is known as the NAV.
Additionally, Grayscale’s ETF, which is supported by its Bitcoin Trust, is listed on the stock market. The Bitcoin trust, according to their website, “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 buying, storing, and safekeeping BTC, directly. .” It is the first security whose value is exclusively derived from the price of Bitcoin.
Along with the general markets, Grayscale’s assets under management (AUM) figure has also fallen. According to Coinglass, the total value of the Bitcoin Trust’s holdings has fallen below $10 billion. The market price per share is $8.79, however the holdings per share equal $14.83, resulting in a 40% discount.
The Ethereum Trust, Grayscale’s second-largest fund, is in no better shape. With a holdings per share of $11.44, there are approximately $3.4 billion in AUM. Additionally, the market price per share for that fund is $7.71, implying a discount of -32.6%.
The Grayscale discount has increased as a result of the recent collapse in bitcoin prices to a new low for this bear market cycle. On Thursday morning (EST), Bitcoin fell below $15,700 levels. Since the asset’s peak in November 2020, this is the lowest it has ever been.
Bitcoin is presently down 74.37% from it’s all-time high from this time last year, having dropped 21.82% over the previous five days. At the time of writing, the price of Bitcoin was $16,654, up more than 5%.