GBTC’s Premium Went Negative!

Negative GBTC Premium

GBTC, which often trades at a high premium traded negative today. Right now, BTC is at $48k and Grayscale is trading under $45.

In general, I would take this as a sign that Bitcoin is oversold, fear is up and greed is down, and this is a point of maximum opportunity for GBTC.

However, there is also a bit of an issue with arbitrage traders who profit from the premium suddenly not having their strategy work anymore. The issue basically would boil down to BTC being sold off instead of GBTC market shares being bought, thus bringing down the price of BTC and potentially crashing the price of GBTC further.

Anyway, despite worst-cases, actually, in the past negative premiums on Grayscale products (it is rare, but it has happened) signal markets bottoming just like large divergences between NAV and market price have signaled topping. So I’m going to go with simple here and say “GBTC gets you Bitcoin cheap right now, and you don’t even have to worry about custody…. cool.”

TIP: What if GBTC just keeps dropping? Well if it goes low enough I’ll buy it all (I mean it has to go really low for that math to work, but I mean half-joking right). Despite the management fee…. BTC is literally on sale via GBTC and it’s crazy. Yay!

Author: Thomas DeMichele

Thomas DeMichele has been working in the cryptocurrency information space since 2015 when was created. He has contributed to MakerDAO, Alpha Bot (the number one crypto bot on Discord),...

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Pretty shallow analysis