The Grayscale Bitcoin Trust (GBTC) is selling at a 48.62 percent discount, which worries investors and analysts. Investors believe a sell-off may be imminent as DCG is also facing financial problems. Concern is growing in the crypto community as Grayscale’s GBTC is almost 50 percent off. As of December 9, the GBTC discount or premium to NAV is 48.62 percent. GBTC shares are trading at $8.03. Here are the details…
Could Grayscale Bitcoin Trust discount trigger the sale?
Market analysts and the general crypto community fear that the discount could trigger a sell-off. One of the main reasons for his concern is that sister company Genesis stopped withdrawals following the collapse of FTX. Twitter user Satoshi Stacker said:
GBTC is currently trading at a 50% discount. They hold about $11 billion in BTC. What will stop them from dissolving the fund, paying the USD value to each GBTC holder, selling Bitcoin and thus pocketing the $6 billion?
Parent company Digital Currency Group also owes about $2 billion. Along with this, approximately $1.7 billion is loaned to Genesis. Lumida Wealth CEO Ram Ahluwalia said he believes DCG used GBTC shares as collateral in the Genesis loan. Ahluwalia also says that DCG has “sufficient revenue-generating power to absorb these liabilities and losses.” He does not see the risk of bankruptcy as a possible outcome. However, Ahluwalia noted that if Bitcoin drops further, the company may have issues.
DCG is on the agenda this month
Digital Currency Group has been in the news a lot this month because of the Grayscale incident. Bernstein noted that DCG has a few different options on its table. Raise capital, dissolve GBTC trust or sell non-strategic assets. This saves Grayscale. Analysts Gautam Chhugani and Manas Agrawal noted that the structure of the GBRC trust protects its owners and is “protected from failures in DCG or DCG group assets.” Still, investors are worried about the status of GBTC and whether it can open up for further market crashes.
The SEC has asked crypto firms to disclose details about the crypto winter and the collapse of various companies to investors. He also published a guide about it. It also required these companies to disclose information about material exposure to financially distressed companies in the market. This is a big step forward by the SEC, which has not been watching the cryptocurrency market closely since the beginning of 2022. Meanwhile, the SEC is investigating FTX, which is at the center of many financial woes in the market. However, a pro-crypto lawmaker blamed SEC Chairman Gary Gensler for the stock market crash.
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