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Grayscale Bitcoin Fund (GBTC) 47% Discount As DCG Navigates Treacherous Waters

2 mins
Updated by Kyle Baird
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In Brief

  • The Grayscale Bitcoin Trust (GBTC) is operating at a discount of 47%.
  • Grayscale is a subsidiary of DCG, and the Genesis bankruptcy has affected the parent company in many ways.
  • DCG has recently sold some of its shares in Grayscale.
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The Grayscale Bitcoin Trust (GBTC) has dropped to a discount of 47%. This is a near-record markdown for the fund, which saw its biggest discount in December 2022.

Grayscale’s Bitcoin fund (GBTC) has taken an enormous drop, falling to a near-record-low discount of 47% on its net asset value. The price drop comes as the crypto market stutters and stops, attempting to break through resistance levels. Grayscale’s bitcoin offering is the largest publicly traded bitcoin fund in the fund, and the steep discount is a sign of the times the market is going through.

GBTC Price by TradeBlock
GBTC Price: TradeBlock

The information on TradeBlock shows the extent to which the Grayscale Bitcoin Trust has dropped. The discount has grown over the past few weeks and is at its widest point since late December 2022. At that time, the discount was 49%.

The collapse of FTX partially played a role in the steep discount of December. It is tremendous pressure for the trust, though Grayscale may weather it out if it can get through some of its troubles at the moment.

There is perhaps a reason for the fund’s drop in that Grayscale’s parent company is Digital Currency Group (DCG). The latter is facing tough times because of the bankruptcy of Genesis, one of the year’s biggest stories so far.

DCG Sells Shares in Grayscale Crypto Trusts

Among the developments, DCG has started to sell its shares of Grayscale. This is to help it deal with the Genesis crypto firm and its attempts to navigate bankruptcy.

DCG owned about 67 million shares in the GBTC trust, worth around $784 million. However, it would want to sell only a few GBTC shares, as it generates a lot of money. The company is between a rock and a hard place as it stands.

Osprey Funds Files Lawsuit Against Grayscale

Grayscale is also facing its own set of troubles. Osprey Funds recently filed a lawsuit against Grayscale for “false and misleading advertising” related to the crypto fund. Osprey Funds also offers crypto investment products.

Fir Tree Capital Management has also asked the Delaware Chancery Court to investigate Grayscale’s apparent mismanagement of customer funds. Investors have shown concern over the Grayscale Bitcoin Trust since December.

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Rahul Nambiampurath
Rahul Nambiampurath's cryptocurrency journey first began in 2014 when he stumbled upon Satoshi's Bitcoin whitepaper. With a bachelor's degree in Commerce and an MBA in Finance from Sikkim Manipal University, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has helped DeFi platforms like Balancer and Sidus Heroes — a web3 metaverse — as well as CEXs like Bitso (Mexico's biggest) and Overbit to reach new heights with his...
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