Bitcoin Now Costs $12,500 at This Trust, And You Can Even Buy It

In 2017, the Grayscale Bitcoin Fund was the most popular way to get exposure to the cryptocurrency markets for institutional investors. With the advent of Bitcoin futures eTPs, investors’ attention shifted, and the discount for the fund began rising to unimaginable values.

Spot is 36% less expensive

Arcane Analytics data shows that Grayscale is much cheaper than the spot to gain exposure to Bitcoin. The record-breaking 36% discount on the NAV of GBTC funds made it more profitable to purchase Bitcoin via the fund than the spot asset.

The current discount on GBTC, and the inflows to it, paint a clear picture that institutional investors don’t feel it is a good time to invest in Bitcoin or the cryptocurrency market generally.

Last week’s record-breaking 36% GBTC discount resulted in an implied bitcoin price at $12,500.

Current discount means that GBTC will be available until January 2045. pic.twitter.com/gW4DEouZAp

– Arcane Research (@ArcaneResearch) October 5, 2022

Investors might find a high discount against NAV a great opportunity when Bitcoin is in the uptrend again. This is because the discount tends turn premium when there is a rising demand for such exposure.

GBTC is not something that investors would prefer to avoid. This is due to the fact that there are some drawbacks, such as the $50,000 minimum investment, lock period, and a significant management fee.

Given the low volume of Bitcoin and Ethereum ETPs, and the fact that funds are available in both the U.S.A and Canada, institutional inflows into the cryptocurrency market are generally difficult.

The institutional market side of the crisis will likely continue until the U.S. enforces strict monetary policies to combat inflation.