Increased Demand Pushes Premium on Grayscale Bitcoin Trust

Increased Demand Pushes Premium on Grayscale Bitcoin Trust

Taking pride as one of the most trusted Bitcoin fund and cryptocurrency-focused investment vehicles, the Grayscale Bitcoin Trust has announced a surge in the premium rates of Bitcoin (GBTC) and Ethereum (ETHE) shares after a two-month-long struggle.

The surprising rise in the premium figures is a direct impact of the positive market conditions prevailing presently. With a sudden rise in the demand for cryptocurrencies, the industry has witnessed a sharp expansion in the volume of institutional investors.

As per the report, the premium for Ethereum shares increased to 12.3% from 11.3%, whereas the Bitcoin discount dropped from -18.2% to -3.8%. The GBTC discount saw a 14.4% drop in value, and these figures have not been witnessed ever since the end-of-March. The chief reason for the surge in premium can be attributed to the release of Simplify US Equity PLUS GBTC ETF. The financial product allows investors to bet 85% of the holdings in stocks and a maximum of 15% in crypto through GBTC.

Talking about the prevailing condition, Ben Lilly, a market analyst of Jarvis Labs, stated that investors focus on hoarding crypto tokens during the existing volatile market events. The involvement of traders has increased, including the market movers/investors. These investors get involved in bulk trading across exchanges and OTC clusters.

The premiums were moving with good returns in February but faced a downfall since the start of May. This situation was active even when Bitcoin price climbed the success ladder, indicating that prominent investors laid stress upon the retail traders. Continuing the surge, predictions see the premiums rising in June as well with new shares getting undisclosed.

The Bitcoin market has seen a bullish trend during the unlocking phase earlier, specifically because of the rise in arbitrage trading. In such trading, traders unwind GBTC at the NAV and then sold at a premium thereon. The shares remain at a locking period of 6 months post issuance. Lilly affirmed that the bullish trend was likely to happen with the recent unwinding of shares and 31,000 BTC onboard for unwinding in June. The $250 Million worth of Bitcoin shares purchased by DCG, the owner of the Grayscale portal clubbed with the ETF launch, added to the positivity in the market space. The surge in premium is likely to expand the proliferation of cryptocurrencies in the financial field.


Christopher McMillan works as a lead content writer at He has a deep interest in cryptocurrencies and he guides people on how to trade cryptos on a cryptocurrency exchange.

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