Grayscale Bitcoin Trust Hits Record Discount Of 21.3%

 | Dec 21, 2021 02:02AM ET

h2 Key Takeaways
  • Grayscale Bitcoin Trust (OTC:GBTC) closed last week with a 21.3% discount.
  • Grayscale's flagship product GBTC has registered a record discount.
  • At last week's end, the price of one GBTC share was $34.42, which is 21.3% lower than its underlying value.
  • The increasing discount on GBTC may hint at weakening institutional interest in the asset class.
  • As of last week's closing price, Grayscale's GBTC traded at a 21.3% discount to its underlying value.
h2 GBTC Hits Record Discount/h2

Grayscale's flagship product has registered a record discount. GBTC's last recorded price is 21.3% lower than the underlying price of Bitcoin held against it. According to Grayscale data , as of Dec. 17, 2021, the price of one GBTC share was $34.42, whereas its net asset value was 0.00093 BTC, the equivalent of roughly $43.77.

GBTC previously traded at a discount of over 20% in May, but the 21.3% markdown is a record low. Grayscale's GBTC product lets investors gain exposure to Bitcoin through a private trust fund. Launched in September 2013, it holds $30.3 billion in assets under management and issues regulated shares tracking Bitcoin's price.

Due to the way GBTC is structured, its shares often trade at a premium or discount. However, the current discount of 21.3% is the largest in GBTC's eight-year history. The discrepancy in the underlying value and market price of GBTC is a helpful indicator of institutional sentiment surrounding the top crypto asset.

The increasing discount on GBTC could potentially hint at weakening institutional interest in the asset class. The record low comes as Bitcoin has struggled to maintain strength in the market. It's currently trading at roughly $46,000, down approximately 33% from its Nov. 10 all-time high price of $69,044.