A well-known Bitcoin critic suggested that a cryptocurrency has poor demand owing to a lack of enthusiasm in purchasing it even at a significant discount. The Grayscale Bitcoin fund is among the first choices for institutional investors interested in participating in the fast-growing cryptocurrency sector. Now, Grayscale’s GBTC discount has reached 26 percent owing to the fund’s performance and Bitcoin’s trading history.
Peter Schiff, who is a founding member of the EuroPac Gold Fund, informed via a tweet, both institutional and retail clients may acquire digital gold through the GBTC fund for only 73 cents each USD 1 worth of Bitcoin.
The negative premium rate causing disbalance indicates that GBTC’s disclosed accounting NAV is trading at a discount to the fund’s exchange-traded value. GBTC is accessible for OTC trading on a variety of platforms.
Claims may be incorrect
The claim of Schiff regarding low demand for Bitcoin owing to a lack of buying interest may not be correct due to following reasons:
- To have the digital currency through Grayscale Bitcoin Trust, individuals must be willing to spend at least USD 50,000 for an entrance. Such an amount is too hefty of investment for the general public.
- Institutional investors may choose more liquid holdings through futures-based exchange-trading funds over illiquid OTC alternatives.
While the futures-backed ETF is not a solution for institutional cryptocurrency investors, institutional flows on the market show that it is still a more popular option than OTC funds.
