Mike Novogratz Opines Why GBTC Still Trading at Discount Makes Sense

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Sat, 03/27/2021 - 12:54
Yuri Molchan
Head and founder of Galaxy Digital crypto bank shared his take on the continuing GBTC discount and the role of Grayscale for the crypto community in general
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Mike Novogratz, former Goldman Sachs asset manager, and the founder of Galaxy Digital crypto fund, has taken to Twitter to share his take on the main product of Graysclale product – Grayscale Bitcoin Trust (GBTC) and why it keeps trading at a discount.

Here’s what the crypto influencer has to say on this.

Image via Twitter

 Why 15-20% discount to NAV makes sense

Novogratz has commented on the frequent talk about GBTC continuing to trade at a discount. He believes that since GBTC is a perpetual security and charges a 2-percent management fee annually, a 15-20 percent discount makes sense if the investment is for 7-10 years.

Many closed end funds trader on the same terms, Novogratz pointed out. The second what he has mentioned was the role of Grayscale as a pioneer with its cryptocurrency-based trusts. Now, several ETFs based on crypto have launched in Canada that charge 40 basis points, narrowing the market for Grayscale.

Similar funds also exist in the US but they charge low fees.

As of March 26, the GBTC discount amounts to 7.28 percent.

As reported by U.Today last week, Grayscale had launched five new cryptocurrency trusts based on LINK, FIL, MANA, BAT and LPT.

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Novogratz thanks Barry Silbert as Grayscale targets an ETF launch

In other tweets in the thread, the CEO of Galaxy Digital stated that Grayscale with its Bitcoin Trust has been very well serving the crypto community, as well as accelerating cryptocurrency adoption.

Novogratz also reminded the community that Grayscale is making attempts at launching a Bitcoin ETF and said that it is “difficult but elegant”.

About the author

Yuri is a crypto journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future in many of its aspects. ‘Hodls’ major cryptocurrencies and has written for multiple crypto media outlets. 

His articles have been quoted by such crypto influencers as Tyler Winklevoss, John McAfee, CZ Binance, Max Keiser, etc.

Currently Yuri is a news writer at U.Today and can be contacted at yuri.molchan@u.today.


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