Grayscale Bitcoin shares have been trading at a discount for over a month now, and one of the investors is not happy. According to GBTC investor Marlton (an investment fund), there was a need to address the 8% discount in the shares.
In a letter that was published on the 6th of April, Marlton asked Grayscale to consider making a tender offer for the shares. As things stand, the shares have an 8% discount when trading at Net Present Value and have a six-month lockup period before any OTC sales can occur. This has not been the norm, as, over the years, the shares have been trading at a premium of their net present value. They have only started to trade at a discount after new crypto-related products hit the market.
Besides offering its misgivings with the GBTC valuation, Marlton is also offering a solution. The fund has stated that the price issue’s answer lies in adopting the Modified Dutch Auction Tender Offer. Marlton said that the Dutch Auction approach is time-tested and has worked well for closed-end fund strategies in eliminating gaps in Net Asset Values.
When using the Modified Dutch Auction Tender Offer, a firm creates a price range that they would gladly repurchase their shares. This allows investors to liquidate by offering shares in the set price range. Grayscale seems to be warming up to such solutions and has announced that it would be applying to turn GBTC into a Bitcoin ETF.