Grayscale, The World’s Largest Bitcoin And Crypto Asset Manager, Has A Massive ‘

[syedrasool2011]

Both the Grayscale Litecoin Trust and the Grayscale Bitcoin Cash Trust began trading publicly almost two weeks ago and have seen swinging triple-digit premiums since. The litecoin fund was briefly trading at a premium of over 1,200% on the underlying litecoin price, data produced by analysts at Arcane Research showed. It's now down to a mere 600% premium.

The funds have collected almost $50 million from accredited investors over the last two years and can now be traded like stocks, allowing over-the-counter investors to gain exposure to the cryptocurrencies without having to deal with clunky bitcoin and crypto exchanges that can appear risky.

Elsewhere, the Grayscale Bitcoin Trust, which debuted as the Bitcoin Investment Trust in 2013, has this year consistently traded at a premium of around 20% on bitcoin, while the premium for the ethereum fund, created in December 2017 during the height of the crypto bubble, recently fell under 100% for the first time this year—down from over 800% in June.

"These trusts are based solely on single assets, and should thus not outperform its underlying asset over time," Arcane Research analyst Vetle Lunde wrote. "The excess return should be arbitraged away."

The funds' premiums emerge as public investors buy into existing shares of the fund, with the original accredited investors being the sellers.

"For accredited investors, the custody provided by Grayscale is most certainly of value," Lunde said via email.

"Setting up self custody is a complicated process, and over time Grayscale has gained confidence in their services as a custody provider."

However, the huge and wildly swinging premiums have caused some concern for bitcoin and cryptocurrency market watchers who fear investors might be unaware of the premium they're paying.

More Detail: https://www.forbes.com/sites/billybambrough/2020/08/30/grayscale-the-worlds-largest-bitcoin-and-crypto-asset-manager-has-a-massive-premium-problem/#48be27a446a2

[bigcash2011]

High premium is being offered due to the fact that all big players and investors are expecting a multifold bull run where prices are expected to skyrocket. I hope we will see the start of big bull run from last quarter of this year.