Advertisement
AD

Main navigation

Grayscale's Bitcoin Discount Might Reach 70%, Details

Advertisement
Mon, 21/11/2022 - 11:49
Grayscale's Bitcoin Discount Might Reach 70%, Details
Cover image via stock.adobe.com

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.

Read U.TODAY on
Google News

In the last few days, Grayscale's Bitcoin Trust became the center of the market's attention as the potential insolvency of Digital Currency Group will most likely cause a catastrophe for long-term GBTC holders, as it will push the fund's discount to a record-breaking 70% to NAV.

Advertisement

At DCG's recent board meeting, the topic of the potential liquidation of its GBTC position has been brought up. By getting rid of the massive position in Grayscale's trust at a significant loss, Digital Currency Group would be able to repay some of its liabilities.

Grayscale chart
Source: Ycharts

Recently, DCG launched an urgent fundraising effort to cover a $1 billion hole on its balance sheets caused by Genesis' insolvency. As expected, every possible fund on the market rejected such a questionable offer, but DCG said it has no other choice but to liquidate any assets it can.

Discount you would not want to have

A massive 70% discount to NAV might become a reality if major GBTC holders start liquidating their positions, creating a great buying opportunity for someone who has not yet received exposure to the cryptocurrency market. But it will be a disaster for long-term holders of shares.

Related
ETH Researcher Discloses Important Dogecoin Data Hidden from Users: Details

Even by purchasing GBTC in late 2021 at a large 20% discount, investors would still have to cope with enormous losses and potentially drop their holdings to cover their liabilities in a manner similar to DCG's.

Previously, on-chain sleuths have been actively looking for Grayscale's Bitcoin holdings after the trust crisis emerged on the market and every institution in the industry was marked as potentially insolvent and unreliable.

At press time, GBTC's discount remains at 45%, the highest value in the history of the trust.

Advertisement
TopCryptoNewsinYourMailbox
TopCryptoNewsinYourMailbox
Advertisement

Latest Press Releases

Our social media
There's a lot to see there, too

Popular articles