Skip to content Skip to sidebar Skip to footer

The biggest bitcoin (BTC) institutional investment vehicle is under suspicion because it is trading at a record discount.

The Grayscale Bitcoin Trust (GBTC) is the latest Bitcoin industry entity to feel the heat of the debacle old FTX exchange.

FTX woes see Coinbase pledging to trust GBTC owner

With contagion and fears of a deeper market rout all over Bitcoin and altcoins at present, apprehensions affect even the most well-known and trusted names in the crypto industry.

In recent days, it was the turn of long-beleaguered bitcoin investment fund GBTC amid troubles at related crypto firm, Genesis Trading.

Like Cointelegraph reportedparent company Digital Currency Group (DCG), as well as operator Grayscale itself, quickly sought to reassure investors and the market that its flagship product was financially sound.

That didn’t seem like enough to satisfy the nerves, however, leading to additional public declarations of faith in DCG and GBTC.

Among them was Coinbase Institutional, the institutional investment arm of the major exchange Coinbase.

“Nothing is more important than making sure our clients’ assets are safe,” tweeted November 17.

“With 10 years of expertise in creating a secure and compliant custody solution, Coinbase Institutional is proud to provide separate cold storage services with our qualified custodian.”

GBTC’s image has been under strain for some time. Since 2021, it has been trading at a discount to the spot price of BTC, a discount that is now approaching 50%.

GBTC premium to assets held versus BTC/USD chart. Source: Coinglass

Amid a lack of demand, speculation has increased on rumors that Grayscale could end up being bought if Genesis Trading fails.

This change of course could have implications for GBTC, as Grayscale remains theoretically committed to convert it to a traded index fund (ETF).

“While this is a difficult time for a lot of crypto, I am deeply optimistic about the future of this industry, Grayscale’s business, and the opportunity for investors,” said Michael Sonnenshein, CEO of Grayscale. tweeted November 19.

Investor Lepard: “I bought more” GBTC shares

Consensus on the $10.5 billion worth of GBTC likely to be forcibly sold remains weak.

Related: Grayscale cites security concerns for on-chain stash evidence retention

“Genesis may disappear, but I find the chances of GBTC’s trust being liquidated very unlikely, given what a cash cow it has been,” said Lyle Pratt, creator of the messaging platform. VidaGlobal, reacted.

“Someone like Fidelity is more likely to buy it and keep it going.”

BTC holdings in grayscale against the BTC/USD chart. Source: Coinglass

The growing discount following the FTX saga has meanwhile made GBTC a somewhat ironic “buy” for names such as ARK Invest and Lawrence Lepard, Chief Investment Officer at Equity Management Associates.

“Lots of questions and DMs. Lepard view on Grayscale and GBTC Spoiler alert: I own it,” he began a dedicated Twitter feed saying over the weekend.

“I’m buying more. It’s still less than 5% of my BTC holdings in case I’m wrong. Sovereign ownership of the key is a must. And top priority.

Combined Grayscale Bitcoin Trust (GBTC) holdings for ARK Invest ETFs (screenshot). Source:

On the severity of the contagion for DCG and its corporate family, Leopard nevertheless acknowledged that “it’s impossible to know how distressed they are.”

He continued to analyze the fallout if the worst-case scenario – bankruptcy – ensued.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.