$32bn Grayscale Bitcoin Trust feels the heat from cheaper ETFs

$32bn Grayscale Bitcoin Trust feels the heat from cheaper ETFs

The North American rollout of bitcoin exchange traded funds appears to have tipped the world’s largest crypto fund into a seemingly permanent discount to its net asset value.

The $32bn Grayscale Bitcoin Trust (GBTC), which owns 3.5 per cent of the world’s bitcoin, currently trades 15 per cent below the value of its underlying assets.

It had traded at a substantial premium to NAV for much of its existence but stumbled to a sharp discount after the emergence of the first North American bitcoin ETF in Canada in February.

The flip from premium to discount has hit investors in the pocket. While GBTC’s share price rose 42 per cent in the first 10 months of this year, its NAV jumped 92 per cent and the price of bitcoin 95 per cent, according to Morningstar. In the 12 months to the end of October, while bitcoin surged 340 per cent, GBTC’s share price was up 220 per cent, Morningstar found.

Some 47 funds, including the $5.5bn Ark Next Generation Internet ETF, separately managed accounts and model portfolios, held GBTC as of September, according to Bobby Blue, senior manager research analyst at Morningstar, making it the most widely held crypto-related product.

“I think it’s a problem [for