Digital Currency Group (DCG), Grayscale's parent company, has come under increasing pressure to address a discount that had widened to nearly 50% towards the close of 2022 SteveAlpher reports
The closed end trust with more than $10 billion in assets under management is up 17.5% to begin the year versus about a 5% advance in the price of bitcoin to its current $17,300. That's brought the GBTC discount to NAV down to about 38% – the narrowest in eight weeks – after having closed out 2022 at a 45% discount.
This year's early narrowing could be due to the increasing pressure on Grayscale parent Digital Currency Group to address the. There are calls from a number of crypto sector players for the trust to be liquidated, or at least for Grayscale to allow redemptions, which would allow GBTC investors to quickly realize the full value of their holdings. Hedge fund Fir Tree late last year, calling for the company to lower its fees and resume redemptions as a way to narrow the discount.
Also possibly at work could be any investor positioning taking place around the start of the year. Having grown fat in a number of one-way crypto trades last year, traders might be covering some of those bets as 2023 begins. Alongside the move in GBTC to start the year, there have been sizable rallies in the stocks of crypto exchange Coinbase and bitcoin miners like Marathon Digital and Riot Platforms – all three of which tumbled 75% or more in 2022.
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