Grayscale’s GBTC Discount Widens to Near-Record High

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.

A January rally ended after an announcement that Grayscale would sell shares in its trusts to repay creditors of Genesis, which filed for Chapter 11 bankruptcy protection on Jan. 19, and amid uncertainty over Grayscale’s decision to sue the Securities and Exchange Commission if the U.S. agency rejected its application to turn the trust into a spot bitcoin exchange-traded fund.

Grayscale and CoinDesk share the same parent company, Digital Currency Group.

Shares of GBTC have not traded at a premium since March 2021. (TradeBlock)

“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 Greyscale could have a similar impact.”