{"id":265596,"date":"2021-06-03T14:18:41","date_gmt":"2021-06-03T11:18:41","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/why-is-wall-street-becoming-less-interested-in-grayscales-bitcoin-trust\/"},"modified":"2021-06-03T14:18:41","modified_gmt":"2021-06-03T11:18:41","slug":"why-is-wall-street-becoming-less-interested-in-grayscales-bitcoin-trust","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/why-is-wall-street-becoming-less-interested-in-grayscales-bitcoin-trust\/","title":{"rendered":"# Why is Wall Street becoming less interested in Grayscale\u2019s Bitcoin Trust?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3c8a5270296\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3c8a5270296\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/why-is-wall-street-becoming-less-interested-in-grayscales-bitcoin-trust\/#Grayscale_no_longer_the_only_option_for_investors\" >Grayscale no longer the only option for investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/why-is-wall-street-becoming-less-interested-in-grayscales-bitcoin-trust\/#Musk_rattled_Wall_Street_Bitcoin_investors\" >Musk rattled Wall Street Bitcoin investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/why-is-wall-street-becoming-less-interested-in-grayscales-bitcoin-trust\/#Grayscale_ETF_in_2021\" >Grayscale ETF in 2021?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Why is Wall Street becoming less interested in Grayscale\u2019s Bitcoin Trust?  <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-5a136f3a>There is a reason why Grayscale Bitcoin Trust (GBTC) emerged as a benchmark to measure institutional interest in Bitcoin (BTC). <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Grayscale_no_longer_the_only_option_for_investors\"><\/span>Grayscale no longer the only option for investors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The digital currency investment product was among the only ones that offered hedge funds, endowments, pension funds, and family offices a way to gain exposure to Bitcoin without needing them to own the digital asset themselves.<\/p>\n<p>Therefore, a rising capital inflow into GBTC \u2014 such as the one <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.globenewswire.com\/news-release\/2021\/01\/14\/2158755\/0\/en\/Investors-Direct-More-Than-3-Billion-to-Grayscale-Investments-in-Q4-2020.html\">reported last year<\/a>, wherein Wall Street investors deposited about $18.2 billion in the fund \u2014\u00a0served as a metric to gauge growing institutional interest in the crypto sector. Conversely, a declining capital inflow reflected institutional withdrawal or profit-taking, like the one h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ening since the first quarter of 2021.<\/p>\n<p>On-chain analytics service Skew reported Thursday that GBTC stopped attracting fresh investments after February 2021. The capital inflows paused right when GBTC started trading at a negative premium to its net asset value, or NAV. NAV represents the\u00a0underlying market value of the holdings.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-06\/966aff28-ea74-4b49-9761-bd82ca27c493.jpeg\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>Money stops flowing into Grayscale Bitcoin Trust as its premium flips negative. Source: Skew<\/em><\/figcaption><\/figure>\n<p>The GBTC premium was upward of 30% at the beginning of this year. But the latest Skew chart pinpoints it at -11.40%. GBTC&#8217;s premium to its NAV was min40.20% at its sessional low, its worst level in history.<\/p>\n<p>Meanwhile, GBTC premium logged mild recoveries in early April after Grayscale announced its intentions to convert its trust structure to an exchange-traded fund (ETF). The New York firm&#8217;s decision came in the wake of growing competition from then-newly launched ETFs in Canada, primarily as they offered better expense ratios than Grayscale&#8217;s.<\/p>\n<p>For instance, Purpose, the world&#8217;s first physically settled Bitcoin ETF, surfaced with an expense ratio of 1%. Evolve and CI Galaxy, other Canadian Bitcoin ETFs, offered 0.75% and 0.40%, respectively. Meanwhile, Grayscale&#8217;s expense ratio was a heightened 2%.<\/p>\n<p>Business rivalries with Canadian Bitcoin ETFs might have also choked capital inflows into GBTC. Purpose, for instance, raked in $1 billion capital a month after its launch in February, reflecting that demand for Bitcoin investment products remained higher despite a plunge in GBTC&#8217;s inflows.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Musk_rattled_Wall_Street_Bitcoin_investors\"><\/span>Musk rattled Wall Street Bitcoin investors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The period also saw Bitcoin&#8217;s spot rate riding higher on the Elon Musk factor. Following Tesla&#8217;s revelation that it was holding $1.5 billion worth of BTC in its balance sheets, the cost to purchase one Bitcoin rose from as low as $38,057 on Feb. 8 to as high as $64,899 on April 14, with speculators believing that more corporates would replace a portion of their cash holdings with the flagship cryptocurrency.<\/p>\n<p>But GBTC premium stayed negative during the course of Bitcoin&#8217;s February-April price rally. Its minus 40.20% bottom appeared when BTC\/USD started shedding its gains owing to profit-taking, China&#8217;s crypto ban, and Tesla&#8217;s Bitcoin dump rumors.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-06\/8397f780-e229-4bd3-87b6-e2abc8caff7d.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>Bitcoin correction sentiment accelerated after Musk criticized the cryptocurrency for its carbon footprints. Source: BTCUSD on TradingView<\/em><\/figcaption><\/figure>\n<p>Daniel Martins, the founder of independent research firm DM Martins Research, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/seekingalpha.com\/article\/4430675-grayscale-bitcoin-trust-dont-just-guess-strategize\">highlighted<\/a> the decline as a sign of waning Wall Street interest in Bitcoin-related investments, especially after the cryptocurrency became a clear victim of Musk&#8217;s anti-Bitcoin tweets mid-May, losing more than half its valuation at one point later.<\/p>\n<p>Martins further noted that Grayscale reported 500% higher annualized returns than Nasdaq, but its correction was also worse than the 2008&#8217;s Great Recession \u2014 82% vs. Nasdaq&#8217;s 17%. That made Grayscale&#8217;s bitcoin investment product an &#8220;ultra-leveraged bet,&#8221; accompanied by an inferior risk-adjusted performance. The analyst added:<\/p>\n<blockquote><p>&#8220;GBTC&#8217;s volatility has been nearly nine times as high as the Nasdaq&#8217;s: 145% vs. 17%.&#8221;<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Grayscale_ETF_in_2021\"><\/span>Grayscale ETF in 2021?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Martins&#8217; statements highlighted possibilities that GBTC premium could face further downside moves as investors hunt for more stable alternatives against Bitcoin&#8217;s ongoing price correction. <\/p>\n<p>Moreover, its rivalry from other digital currency investment alternatives, including cryptocurrency custodian services that offer institutional investors to own real crypto assets at a cheaper fee, further risks limited capital inflow.<\/p>\n<p>ETF.com&#8217;s analyst Sumit Roy <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.etf.com\/sections\/bitcoin-crypto\/grayscales-bitcoin-golden-goose-gbtc\">wrote<\/a> that the Grayscale fund&#8217;s potential transition into an ETF ends its 2%-fee days as it would need to compete with an army of other ETFs, led by firms like Bitwise, Vanguard, Fidelity, Cboe, and others. He added:<\/p>\n<blockquote><p>&#8220;Yet regardless of what happens, GBTC is poised to be a force, and will likely stick around no matter how the crypto fund space evolves.&#8221;<\/p><\/blockquote>\n<p>But whether the US markets would have access to a Bitcoin ETF in 2021 remains a mystery itself. Financial Times <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.ft.com\/content\/f9f2d454-36b6-43bf-9e5b-695cd65ca427\">reported<\/a> earlier this week that most ETF applications gather dust as the US Securities and Exchange Commission&#8217;s chair\u00a0Gary Gensler reiterated worries about investor protection in crypto markets.<\/p>\n<blockquote><p>\u201cI expect that [delay] to happen with all of our filings, to be honest,\u201d said Laura Morrison, global head of listings at Cboe.<\/p><\/blockquote>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/why-is-wall-street-becoming-less-interested-in-grayscale-s-bitcoin-trust\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Why is Wall Street becoming less interested in Grayscale\u2019s Bitcoin Trust? &#8221; There is a reason why Grayscale Bitcoin Trust (GBTC) emerged as a benchmark to measure institutional interest in Bitcoin (BTC). Grayscale no longer the only option for investors The digital currency investment product was among the only ones that offered hedge funds,&#8230;<\/p>\n","protected":false},"author":1,"featured_media":265597,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDYvNGY2MDM0ZTItZGE5Ni00NjA5LWE2ODItYTc5OWFmMTAyZGQwLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[79806,74862,81951,74937,75849,76550,74939,22974,65078,73785],"class_list":["post-265596","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-analysis","tag-bitcoin","tag-bitcoin-analysis","tag-bitcoin-price","tag-etf","tag-grayscale","tag-market-analysis","tag-canada","tag-mainstream","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/265596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=265596"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/265596\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/265597"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=265596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=265596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=265596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}