Grayscale Bitcoin Trust (GBTC), the largest Bitcoin investment vehicle, started trading in the spot market by entering the biggest downturn ever.
On-chain analytics resource Coinglass to the data As of June 17, GBTC shares on major stock exchanges fell by 34 percent against BTC/USD.
GBTC suffers from market downturn
Conditions are worsening for investors large and small after the ongoing turmoil in the decentralized finance (DeFi) space has taken a toll on the crypto market.
Current data shows institutions failing to bounce back from the market downturn, with the already underperforming GBTC hitting new lows.
The fund’s shares are actually at historical lows for GBTC premium, which has long been troubled by its lower cost than Bitcoin. On June 17, Bitcoin traded 34.2 percent cheaper than its spot price (also known as net asset value or NAV).
As the BTC/USD pair retested $20,000 twice, there was a similar sharp decline in the spot markets.
GBTC premium, holdings and BTC/USD parity comparison. Source: Coinglass
An unfavorable environment has been created for institutional crypto products in the wake of the Terra and Celsius collapses as Grayscale seeks permission from US regulators to convert GBTC into a Bitcoin spot price exchange-traded fund (ETF).
GBTC’s poor performance has spawned comments criticizing regulators for viewing it as an inaccurate risk assessment, as the firm seemingly tries to stay buoyant.
Bitcoin spot ETFs are illegal in the US due to investor protection concerns. In other words, countries like Canada and Australia were allowed to gain first mover advantage.
Shares of $GBTC are now 66.9% lower than they were at the peak of 2017 despite $BTC trading 5% higher.
Make sure to thank Mr. Gensler for the protection everyone. pic.twitter.com/Q1cAw8hBtR
— Dylan LeClair 🟠 (@DylanLeClair_) June 16, 2022
“Without ETF approval, GBTC could place a minus 100 percent premium on NAV,” Vijay Boyapati said this week. she made a joke.
Hayes calls the crypto market bottom “D-Day”
The liquidity problems in multiple crypto funds have also added to the crypto money sector, which is already facing serious losses. In the process, Three Arrows Capital (also known as 3AC) stands out as the largest GBTC holder with over 38.8 million shares.
Related: These three on-chain data say “Bitcoin price crash is not complete”
As 3AC failed to meet margin call requirements this week, a significant gap opens between GBTC and its competition. ProShares Bitcoin Strategy ETF (BITO), the first US-approved ETF based on Bitcoin futures, has recently added BTC to its assets under management. added.
Arthur Hayes, former head of derivatives giant BitMEX, in the blog post; Celsius has dealt a new blow to Terra and many more projects.
“See below for price, as this group of firms has to liquidate any asset that is not locked into a long-term return strategy,” he predicted.
Random sales of all liquid assets in the credit books will occur. Thus, lenders will be able to return their assets to individual depositors.
Hayes, who previously targeted below $1,000 for Ether (ETH) and $25,000 for Bitcoin, says the reality is much worse.
The upcoming 4th of July weekend break makes him think that ideal conditions will be created for the macro bottom, especially as the second quarter comes to an end.
He continues in his blog post: “There will be a wild ride down from June 30th to July 5th.”
My bottom estimate of $25,000 to $27,000 for Bitcoin and $1,700 to $1,800 for Ether has been shattered. How low can we fall? I believe we will find out the answer in this fateful week.
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