The Grayscale Bitcoin Investment Trust continues to trade at a significant discount compared to the bitcoin held within.
Correction, April 22, 2021: This article originally stated that Grayscale had added $283.3 million in bitcoin to the Grayscale Bitcoin Investment Trust. It has been corrected to reflect that Grayscale added $283.3 million in assets under management.
Grayscale has added $283.3 million in assets under management (AUM) to its premier Grayscale Bitcoin Investment Trust (GBTC) product, despite the fact that the product continues to trade at a significant discount compared to the bitcoin held within.
An update from Grayscale on April 20 indicated that GBTC had $36.1769 billion worth of AUM, and an update on April 21 indicated that its AUM had risen to $36.4602 billion in AUM, a rise of $283.3 million.
Grayscale’s significant increase to the AUM in GBTC came despite the fact that GBTC is trading at a 13.88% negative spread between its premium and net asset value (NAV) at the time of this writing. GBTC hit a record low against NAV in March.
“The development of a negative GBTC premium throws a wrench in the popular carry trade of redeeming Grayscale shares at a premium and shorting bitcoin futures,” as Bitcoin Magazine reported at the time. “This offered a relatively risk-free yield to investors for some time, while simultaneously acting as a one-way street for locking up bitcoin. Now, with the premium deeply in the negative, the incentive has disappeared to redeem shares of GBTC, and this, unsurprisingly, is what has occurred.”
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.