Launched 10 years ago, back in 2013, Grayscale is one of the iconic institutional bitcoin companies. Grayscale is known for its crypto-related funds, including Grayscale Bitcoin Trust (GBTC), and it was long the only practical way for traditional money to invest in digital assets, using its monopoly position to charge notable management fees (2%).
Grayscale’s recent legal victory over U.S. Securities and Exchange Commission (SEC) caused a market-wide stir, uplifting bitcoin momentarily by over 10 percent. Many analysts see the company now having an edge compared to its main competitors.
Multiple experts have suggested the GBTC fund to be undervalued, with the chart below depicting the relationship between the NAV’s simple moving average (30SMA) and bitcoin’s price. According to Axel Adler Jr, any NAV readings below zero indicate undervaluation of the fund.
GBTC’s Famous Premium (or Discount)
One of the most interesting aspects of GBTC has been its premium (or discount), fluctuating widely over the years. Premium to net asset value (NAV), refers to the difference between the nominal value of the trust holdings versus the market price of the holdings. Historically the GBTC’s premium peaked at 132,6 percent in late May of 2017.
