Grayscale Bitcoin Trust (GBTC) losses $14M in Q1

Grayscale recently released its Form 10-Q filing with the U.S. Securities and Exchange Commission (SEC) today. According to the report, Grayscale’s Bitcoin Trust recorded a $144 million loss in the first quarter.

The filings reveal that the trust added 654,600 BTC to its holdings in Q1 2021, up by 8% compared to Q4 2020. Per the report, the company raised its Trust Bitcoin holdings by 17% in Q1 2020, 27% at the end of the second quarter, 16% in the third quarter and 35% in Q4 2020. 

The series of acquisitions brought the Bitcoin held by the Trust in 2020 to a total of $17.7 billion. Following the successive record highs made by Bitcoin this year, the value of the Bitcoin holdings is now sitting above $38.4 billion.

Grayscale’s total assets under management (AUM) is currently at $51.8 billion, spread across different asset classes. As expected Bitcoin Trust has the largest AUM, followed by the Grayscale Ethereum Trust with more than $11 billion in AUM and Grayscale Ethereum Classic Trust $1 billion.

Grayscale Bitcoin Trust’s dropping premium

Grayscale’s Bitcoin Trust has been trading at a negative premium to the net asset value for months, reaching a record minimum of -18.92% on April 26. However, the GBTC was trading at a premium of -15.92% as of May 6.

Many have attributed the falling premium to several reasons, such as the prospects of the U.S. SEC approving a Bitcoin exchange-traded fund (ETF). Another factor could be the competition from non-US Bitcoin ETFs.

In a bid to solve the negative premium, Grayscale’s parent company, Digital Currency Group (DCG) planned to buy back $250 million worth of the GBTC shares. However, a couple of days back, DGC upped the value to $750 million.

Moreover, Grayscale had earlier revealed that it will convert its Bitcoin Trust into an ETF once the SEC approves one in the U.S. 

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