Bitcoin has been on a downtrend since the beginning of the year, but it is currently recording sharp corrections. The coin has lost more than 17% of its value in the past week, trading at around $35,500 at press time.
However, it should also be noted that Bitcoin has lost 50% of its value since its all-time high in November last year. This appears to be affecting some of the large funds offered by Grayscale Investments.
In fact, commentator Peter Schiff note in a tweet,
“The discount to NAV is 27%. Time to drop $GBTC. ”
Meanwhile, Grayscale’s largest and oldest fund, Grayscale Bitcoin Trust (GBTC), which holds $25.3 billion in assets, is currently trading at a record 30% discount according to Coinglass. This, though, returned nearly 26,000% since its inception.
The World’s Largest Bitcoin Fund, $27.1 Billion @Grayscale #Bitcoin Trust ($GBTC), fell to a record discount to its net asset value (NAV) this week. At one point, the stock traded 28 percent below the underlying value of bitcoin held in the trust. pic.twitter.com/EPnRGQGEzb
– Bitcoin (@Bitcoin) January 22, 2022
Having said that, Grayscale’s Total Assets Under Management (AUM) stand at $35.4 billion on Jan. 21 – A massive one-day drop from an AUM of $38.7 billion reported on Jan. 20.
It should also be pointed out here that at the end of December, Grayscale Investments was holding $43.6 billion AUM under its various crypto offerings. Since then, the fund has lost almost 60% of its AUM from its November AUM of $60.9 billion.
Some time ago, Grayscale CEO Michael Sonnenshein took to Twitter to status,
“Bought a bargain. pump sale. ”
Basically, suggesting that this might be a good time to accumulate.
Having said that, fund manager Grayscale Ethereum Trust’s second largest fund reported an AUM of $8.9 billion. The fund is passively and solely invested in Ethereum which has returned nearly 260% since its inception. As of December 31, however, ETHE held $11.6 billion in AUM. It has recorded a 23% drop since the end of last year.
However, amid prolonged market weakness, Grayscale recently added a new fund called the Bloomberg Grayscale Future of Finance Index. The “Future of Finance” basket in the fund represents companies in the digital economy with categories related to financial platforms, digital asset infrastructure and technology solutions.
Also notable is the institutional interest of ResearchAndMarkets.com report previously stated that GBTC and ETHE are popular crypto funds through which investors get exposure to BTC and Ether, adding,
“[It] is an important measure of institutional interest and trust in Bitcoin and other cryptocurrencies. ”
Therefore, it would not be wrong to infer that institutional trust also appears weak at this point. Data from Coinshares digital asset fund outflows weekly also illustrate outflows for the last five consecutive weeks.