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Grayscale Bitcoin Trust Has dropped By 40% In Value | CoinGabbar News

  • The fall of the crypto exchange FTX continues to affect the broader crypto market.

  • Grayscale Bitcoin Trust Fund's negative premium has risen to 42.7%.



18 Nov 2022 By : COIN GABBAR
Grayscale Bitcoin Tr

The collapse of the cryptocurrency exchange FTX has made a significant dent in the global digital asset market. 

This debacle has had an influence on several cryptocurrency exchanges and lending platforms. However, this fire has now spread to the world's largest cryptocurrency fund.

As per reports, the Grayscale Bitcoin Trust Fund (GBTC) has a negative premium of 42.7%. While Ethereum Fund's negative premium fell to 40.12%. Both trust funds have reached new lows.

Reports suggested that the value of GBTC, which controls 3.5% of the world's Bitcoin, has decreased since investors are cautious to engage in the market following the recent FTX crash. Grayscale, on the other hand, has stated that it was unaffected by the failure of Genesis and its DCG affiliate.

The drop in premium suggests that trust investors have lost 83% of their capital since the Bitcoin price reached its all-time high (ATH) in November. Bitcoin prices have decreased by a whopping 65% year to date (YTD).

At the time of writing, Bitcoin was trading at an average price of $16,751. The total market capitalization of Bitcoin currently stands at $322.7 billion.

Is this a warning to cryptocurrency investors?

According to experts, the fall of FTX has significantly reduced investor trust in cryptocurrency. Due to the recent turn of events, the global digital asset market cap has fallen below the critical $1 trillion mark.

Grayscale investors became concerned on Wednesday after the crypto lending platform Genesis ceased its operations. As per reports, Genesis issued more than $50 billion in loans last year. However, the failure of Three Arrows Capital dealt a significant blow to its lending business.

Genesis and Grayscale are divisions of Digital Currency Group. Genesis operated as GBTC's authorized participant. Until last month, it was in charge of issuing new shares for Grayscale securities.

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