Grayscale Investments BTC Trust has been trading at a negative premium to the net asset value. Unlike now, since its inception, the GBTC had traded at a comparatively high premium of 15 percent. Experts suggest that the reason behind it was the trust being easily accessible to institutional investors.
However, Thursday’s trade saw that the GBTC premium hit its record high plummet of more than -18 percent. This comes with the trust being on the edge of approval from the US SEC and the neighboring Canadian competitors taking up the market share, eventually ending the institutional demand for the GBTC.
For instance, earlier this month, the Purpose BTC ETF of Canada hit an impressive $1.3 billion assets under management when the world’s most famous crypto coin surged to its all-time high. Although the Grayscale investments has $46 billion in assets under management, the Canadian ETF has successfully attracted institutional investors. Only recently, the American SEC began reviewing the application for two EFTs.
On the other hand, the high management fees of the US investment firm have also led to a sharp decline in its demand. With a yearly rate of a whopping two percent, it has failed to catch up with the market. Meanwhile, the Canadian competitors in the market offer low charges of 0.40 percent, 0.60 percent, and one percent. And if the American competitors are approved, they might also offer similar rates.
Grayscale’s trust premium has been in red since February this year as the firm pushed on with decreasing its crypto assets. Reportedly, it liquidated more than two thousand Bitcoins.