Many were caught off guard by the dramatic fall in UST. The negative macroeconomic environment that followed has adversely affected cryptocurrency markets as a whole. Institutional demand plummeted to the lowest levels.
Grayscale Bitcoin Trust (GBTC), Hits Lowest Point
Grayscale Investments has provided a Grayscale Bitcoin Trust investment vehicle. It is currently trading at 33.71% below its NAV, which is a record low. The market players were trying to rid themselves of Bitcoin exposure, as cryptocurrency struggles to reach the $20,000 mark.
The failure of Bitcoin to gain meaningful momentum after a turbulent month shows that the dark days ahead could continue for a long time. Market panic continued to sweep the globe, sending shockwaves all around. Grayscale trust products have suffered losses beyond Bitcoin.
Coinglass data shows that shares of Grayscale Ethereum Trust were trading at a negative premium exceeding 34% according to Coinglass. Furthermore, Grayscale Litecoin Trust (LTCN) and Grayscale Ethereum Classic Trust (ETHC) are in a similar position – in the red by 37.5% and 47.73%, respectively. Bitcoin Cash Trust (BCHG) had a slightly lower negative premium of 8%.
Grayscale faces a deadline to submit its eagerly awaited spot Bitcoin ETF applications. The proposal to convert GBTC in to an ETF is currently being reviewed by the public. The deadline is July 6. The conditions for institutional crypto-based products have become more difficult due to the Terra collapse and the ongoing Celsius investigation.
Grayscale entered 2021 boasting a staggering $20 billion in assets under management (AUM). Much of the crypto fund manager’s achieving the feat was due to Bitcoin’s skyrocketing price. Over the next months, the AUM rose to more than $50 Billion.
However, the market has cooled and so have its products. Grayscale currently has $13.3 billion AUM.
CryptoPotatoAccording to reports, institutional outflows caused by the collapse of total AUM for crypto funds fell to its lowest point since July 2021. Amidst a weak risk appetite, the ongoing volatility drove “fickle” investors to “cash on” the depressed asset prices while the aggregate sentiment remained predominantly bearish.