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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!

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"GBTC’s Premium Went Negative!" contains information about the following Cryptocurrencies:

Bitcoin (BTC), Crypto ETFs / ETNs / Trusts / Funds / etc.

What do you think?

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DAN on

Pretty shallow analysis

Thomas DeMichele on

You can find really detailed articles on the GBTC premium and why it is negative and what it means. But to me, as someone who has traded Grayscale for years, it means “buy the dip.” And if you look back at that day, it was pretty much literally the low, right? I go into more detail on the site, but I sincerely think low GBTC premium = Bitcoin oversold is a solid metric to trade off of. Don’t think it has ever steered me wrong. I don’t give a lot of weight to other theories about ETFs, arb traders, and demand by retail and such. I keep it simple. Discounted BTC is always good, who cares about fund fees in the short term. And beyond this, if GBTC is low it typically means spot BTC is bottoming, so if not GBTC, look at BTC in these times. That is what I do and think, we all have to do our own thing. Anyway, cheers!