An indicator to pay attention to: Grayscale GBTC negative premium 12%

Hello, everyone, I’m Peipei. The mainstream market in the currency circle has been a bit miserable in the past two days. Many friends are wondering whether they are really good or not. It seems that the popularity of NFT is really a bit of a "fishtail" feeling.

I recently learned a new term called: a foundation, which is used to describe funds that have fallen miserably now and all kinds of "mao". When you see such a paragraph on the Internet, it also shows that the financial markets we can pay attention to are actually all Not so good, including the recent rise in US debt that many big Vs are talking about, which will also have a negative impact on risky assets, and as the crypto world becomes more and more mainstream, it is normal that it is difficult to be alone.

There is not much to do today. Let’s just make a brief change. One thing is that we need to pay attention to an indicator recently-the premium of grayscale funds. It seems that we haven't mentioned greyscale for a long time.

At present, the prices of the GBTC and ETHE trust funds in Grayscale have shown a negative premium. There are a lot of data about Grayscale in China. Here I will give you a data page of theblockcrypto website: /data/crypto-markets/grayscale

It mainly shows the changes of various indicators of gbtc or ethe in the form of graphs. For example, the left side of the above figure is the estimated fee income change of gray, and the right is the change of GBTC holdings. It can be seen that gray income has more than half of the source. From the end of last year to the first quarter of this year, open interest has basically increased rapidly during this period, but it seems to have flattened out in the past one or two months.

It is worth noting that the recent GBTC and ETHE both have a negative premium for the first time since 18 years:

The negative premium of GBTC on the 4th is -11.59%. Today there is still a negative premium of 12%. In addition, the data updated by ETHE in March is also a negative premium of 4%:

Negative premium means that the current price of GBTC or ETHE in its internal secondary market is already lower than the market price of BTC or ETH corresponding to its share of each share.

There are three possible reasons for this situation:

1. The primary market is unlocked and released too much and there is no redemption mechanism. The currency circle has also formed a consensus on the crazy growth of the gray position share, that is, a considerable part of it is arbitrage by institutions, and Bitcoin is used to pass the gray one. Level private wood obtains GBTC and waits for the 6-month unlock period, and then sells the coins in the secondary market to earn a premium income. The gray growth trend mainly started in the second half of last year, so it is now also counted as the peak period of unlocking. There are more arbitrage parts, and perhaps their internal trading market does not have enough to undertake.

2. The overseas retail market is sluggish. What you need to buy Grayscale Trust is a Drum Ticket account. Recently, Meigu, especially Technology Drum, is also in a state of confusion, and this part of investment users overlaps, so it will also arouse confidence in GBTC. Insufficient or sell-off, and BTC itself is also in shock. According to the law of historical premium fluctuations, usually when the market is not so good, the premium will drop.

3. The emergence of competing products of the same type. For example, overseas believe that Canada’s new Bitcoin exchange-traded funds (ETFs) may be a factor in the negative premium, and there have been many channels for overseas retail investors to purchase crypto since last year. In comparison, they do not have the 2% annual handling fee of Grayscale and the uncertainty risk caused by this premium. It seems that Grayscale will also have changes to reduce the handling fee.

I personally tend to think that the factor 2 may be larger. In fact, GBTC itself has some speculative elements in it. When the crypto market is hot, its performance is often better than the big cake, so its premium is reduced or even negative. It shows the decline in sentiment in this part of the overseas market.

In addition, I have some comments from overseas who think that this may also represent the bottom of the phase. Emmm, it seems that it cannot be said that it is completely unreasonable. At the end of each wave, many people see the risk of loss, but it also means the beginning of the next cycle. .

Regarding institutional cash-out or something, I haven't seen the data here. The major shareholders of GBTC, blockfi and Three Arrow Capital, have updated their positions this year compared to the data in December last year. I think they have increased by 10 to 20 million shares:

It’s not about the market’s concerns. Of course, this data update is generally delayed for about 45 days. Those who are interested can pay attention to changes in positions.

Regarding the negative premium of grayscale, I think it reflects to a certain extent the short-term market cooling, especially bit and ether. It may be said that the probability of expecting a short-term upward rush will be a bit small.

If the negative premium is short-term, it may not be a big problem, or even an arbitrage opportunity. I think there are many overseas investors discussing this "10% off Bitcoin". It seems that some more impulsive players have already charged GBTC and Has been quilted.

However, if it continues, it will be 20% off and 10% off or even lower. In addition to questioning the so-called amount of money purchased by institutions, I don’t know if Grayscale will face the pressure of opening redemption. There is definitely a way to restore redemption, and once this liquidity is opened up, GBTC will naturally be able to better track the index, but will it have an impact on the btc market, so next we still need to pay attention to this premium dynamic.


However, compared to the data of the Bitcoin market and Grayscale, the knockoff market on the other side, especially the new mining and mining, is still very popular. I don't know whether it is in January 2017 or January 2018. What do you think?

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06.03.2021 11:27