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Grayscale made headlines last week when the investment manager’s Grayscale Bitcoin Trust (GBTC) fell sharply against nett asset value (NAV) to a record low of negative 14.31 percent. All of this may be related to the underlying asset’s downward trajectory, which saw Bitcoin falling by nearly 8% before the weekend.
According to YCharts, the GBTC Discount or Premium to NAV ratio was negative 7.28 percent as of March 26.
Grayscale, which controls the most Bitcoin reserves in the world (worth $34.6 billion at press time), hit a negative premium to NAV late last month. Bitcoin exchange-traded funds (ETFs) based in Canada may have played a major role in this regard.
According to Arcane Research’s Vetle Lunde, exchange-traded bitcoin trading funds now have “more than 800,000 BTC under management.” This equates to approximately 4.3 percent of the circulated availability of the crypto currency.
After New Year’s Eve, he claims that more than 100,000 BTC have been “absorbed by Bitcoin funds.” In all, exchange-traded Bitcoin investment funds “manage $43 billion” in digital currencies.
However, when it comes to handling Bitcoin-specific funds, the company “dominates the space,” accounting for “82 percent of the market,” with $34.7 billion of the crypto asset under management.
According to analyst Mike McGlone, GBTC has outperformed Tesla’s portfolio this year. However, Vetle Lunde noted a downturn in Grayscale’s market dominance, which he attributes to three new ETF approvals in Canada.He further said:
“In the last couple of weeks, the combined AUM of the Purpose ETF, Evolve ETF, and Galaxy ETF has reached a market share of 2.5%.”
Although regulators in the United States are yet to sanction ETFs, companies such as VanEck and Fidelity, which are pending SEC approval, have filed to register. If the Commission approves these filings, it would be fascinating to see how Grayscale plans the counter-move in the face of Bitcoin ETFs.