What factors are causing the discount in GBTC trading?

3 answers

• Nov 23, 2021 · 3 years ago
  One of the main factors causing the discount in GBTC trading is the trust structure of GBTC itself. GBTC is a closed-end fund that holds Bitcoin and allows investors to gain exposure to Bitcoin without directly owning it. However, due to the trust structure, GBTC shares often trade at a discount to the underlying Bitcoin price. This discount can be influenced by various factors such as market sentiment, supply and demand dynamics, and regulatory concerns.
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• Nov 23, 2021 · 3 years ago
  The discount in GBTC trading can also be attributed to the lack of arbitrage opportunities. Unlike ETFs, which can be created or redeemed based on demand, GBTC shares cannot be directly created or redeemed by individual investors. This lack of arbitrage mechanism can lead to persistent discounts in GBTC trading compared to the actual Bitcoin price.
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• Nov 23, 2021 · 3 years ago
  According to BYDFi, a digital asset exchange, the discount in GBTC trading is primarily caused by the trust structure and the lack of arbitrage opportunities. The trust structure of GBTC limits the creation and redemption of shares, which can result in imbalances between supply and demand. Additionally, the lack of direct arbitrage opportunities prevents efficient price discovery, leading to the discount in GBTC trading.
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