A well-known Bitcoin trust that has been an early way for investors to get exposure to the leading cryptocurrency without opening crypto native accounts hit new 52-week lows recently. Here’s a look at what’s going on with the Grayscale Bitcoin Trust GBTC.
What Happened: On Friday, shares of the Grayscale Bitcoin Trust hit new 52-week lows of $11.03. The drop comes during the crypto bear market and as Bitcoin BTC/USD is trading above its yearly lows.
The Grayscale Bitcoin Trust was launched in 2013 as one of the first large ways for investors to gain exposure to Bitcoin without having to open a cryptocurrency wallet.
“Grayscale Bitcoin Trust is solely and passively invested in BTC, enabling investors to gain exposure to BTC in the form of a security while avoiding the challenges of buying, storing and safekeeping BTC, directly,” the company’s website reads.
The Grayscale Bitcoin Trust has $11.9 billion in assets under management.
The fund holds around 3% of the total Bitcoin supply and is among the largest holders of the leading cryptocurrency in the world.
Related Link: How To Buy Bitcoin
Why It’s Important: The Grayscale Bitcoin Trust is one of the most popular stocks that trade over the counter (OTC). In the month of July, the stock was second in volume among OTC stocks with a volume of $1.17 billion. The stock was the highest volume OTC traded stock in the month of June with $2.6 billion in volume.
The fund charges a 2% annual management fee, which for years customers paid for the chance for ease of use and exposure. As cryptocurrency trading became more mainstream and readily available, more investors flocked to buying Bitcoin on their own.
As of Friday, shares of the Bitcoin trust also trade at a 35% discount to the value of the Bitcoin they hold, marking the largest discount for the fund since its launch. Investors who believe Bitcoin will rise in value could see the trust as a hedge, where even with the 2% fee, the holdings are traded at a discount. The discount comes as a reverse from earlier years when investors were willing to pay a premium to the Bitcoin value due to the trust mechanics and ease of trading.
Bankruptcies of cryptocurrency platforms have likely put the Grayscale Bitcoin Trust back in focus. The fund remains a popular investment by institutional investors who want to bet on Bitcoin without the risks and regulation worries.
The Grayscale Bitcoin Trust is also a large holding of the Ark Innovation Next Generation Internet ETF ARKW from Cathie Wood and Ark Invest.
The trust is up over 12,000% since launching, according to the company’s website.
GBTC Price Action: Grayscale Bitcoin Trust hit 52-week lows of $11.03 on Friday. Shares were up 1.74% to $11.39 on Monday versus a 52-week range of $11.03 to $55.05. Shares are down 67% year-to-date in 2022.
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