Grayscale Bitcoin premium rebounds as BTC price falls below $35K — What does it mean?
It was recently reported that the Winklevoss Bitcoin Trust ETF (COIN) (COIN) had filed a Form S-1 with the SEC to list shares on the NYSE Arca exchange. A few days ago, the Winklevoss Bitcoin Trust ETF filed its own Form S-1, this time with the U.S. Securities and Exchange Commission. The filing has already been approved. If the ETF does get listed on the NYSE Arca, it will be the first Bitcoin ETF to list on a U.S. stock exchange. The Winklevoss Bitcoin ETF will be the first Bitcoin ETF listed on a US stock exchange.
The recent price decline in Bitcoin (BTC) has now resulted in the Grayscale Bitcoin Trust (OTCQX: GBTC), the only publicly-traded investment vehicle that tracks the price of Bitcoin, finding itself in a new position. Grayscale Bitcoin has rebounded to an all-time high on the back of a rise in the price of Bitcoin, which was driven by a slightly bigger rally in the value of the cryptocurrency.
The original Bitcoin/Cryptocurrency infographic created by CoinDesk in 2013, as a way of describing what the world of Bitcoin looked like at that point in time, is seeing a resurgence in popularity as the price of Bitcoin continues to fall, and moves below the $35K level.. Read more about gbtc premium negative and let us know what you think.
Bitcoin (BTC) has plunged about 44% from its all-time high of $64,899, marking the end of its second-largest bull run since March 2020. Many analysts, including BiotechValley Insights, see bitter technical factors in the bitcoin market, noting that the flagship cryptocurrency could extend its continued decline to $20,000. However, Glassnode Insights, a weekly newsletter produced by Glassnode’s blockchain data analytics service, expects the bitcoin price to recover in the coming sessions based on the blockchain indicator, which serves as a metric to measure institutional interest in the cryptocurrency.
The measure, called Grayscale Premium, tracks capital flows to the Grayscale Bitcoin Trust (GBTC), the largest investment vehicle for institutional investors seeking access to the bitcoin market. The rise in Grayscale Premium suggests more bitcoin inflows into Grayscale Bitcoin Trust. This forces GBTC to trade at a higher price than the spot price of BTC. Conversely, a decrease in the grayscale premium indicates a decrease in the inflow of BTC, causing GBTC to trade at a discount to the bitcoin spot price. Grayscale Bitcoin Trust added over 50,000 BTC to its reserves in January 2021 and the first half of February 2021. GBTC traded at a premium of 10-20% during the period, reflecting growing institutional interest. Grayscale BTC currently in 2021. Source: Glassnode Nevertheless, the premium fell below 10% in the first half of February. The GBTC began trading below the spot price. During the same period, the BTC/USD spot price rose from a low of $30,000 to nearly $65,000 in April. At that time, the GBTC premium had already fallen below zero. May 13. just before the Elon Musk-led bitcoin market crash on the 19th. In May, the GBTC premium reached a low of 21.23%. That showed that institutional demand for bitcoin investment products has been falling since late February. But the collapse of the price of 19. May improved the performance of Grayscale Premium, according to Glassnode Insights. The figure rose again to -3.8%, suggesting that institutional interest, or at least the conviction of arbitrageurs, has increased at the same time that bitcoin spot prices have fallen. Grayscale premium is reimbursed to the GBTC at a reduced rate for 3 consecutive months. Source: Glassnode The Canadian Target Bitcoin ETF has followed a similar downward trend, with steady inflows in late April and early May and outflows thereafter, indicating weakening institutional demand. noted Glassnode: However, as in the case of the GBTC, demand flows seem to be clearly recovering from the price correction and inflows have picked up since the end of May.
The contrast between the drop in bitcoin’s spot price and the recovery in GBTC prices has shown that institutions have not completely abandoned the cryptocurrency market. Instead, it shows that the downturn has prompted investors to increase their exposure to both the Grayscale Bitcoin Trust and the Canadian Purpose Bitcoin ETF. Glassnode wrote: Institutional GBTC and Purpose ETF products are showing signs of recovery despite the price collapse, indicating the first signs of renewed interest from institutional investors. The analysis portal also cited statistics showing that most sellers were short term holders during the last BTC price drop. Meanwhile, the stock’s long-term-oriented owners have confidently bought into the falling share price.The premium on Grayscale’s Bitcoin trust has fallen back to its old levels today, as the price of BTC continues to fall and a lot of long-term BTC hodlers take profits from their long-term holdings. However, Grayscale’s product is different to most of the other Bitcoin ETFs out there.. Read more about gbtc premium explained and let us know what you think.