Worse than Bitcoin! The world's largest Bitcoin fund's market value shrank by 20% in a week, setting a record low in net asset value

Data shows that the price of GBTC has been falling continuously since last Friday. Its closing price on Thursday was $41.32, down more than 21% from the closing price on April 15. Although it stopped falling and rebounded by more than 1% on Friday, the cumulative decline in the week as of press time was still close to 20%.

At the same time, GBTC was at a premium relative to its net asset value when Bitcoin surged before, but after turning into a discount in early March, the discount has gradually deepened in the past two months, reaching 18.92% as of Thursday this week.

Some analysts believe that this is the largest discount to the net asset value in the history of the trust. With Bitcoin falling below the $50,000 mark for the first time since March, the fund has lost one-fifth of its value in a week.

Regarding GBTC's current deep discount to its net asset value, Stephane Ouellette, CEO and co-founder of FRNT Financial, said in an interview that as the main alternative asset for investing in Bitcoin, GBTC has never been at such a discount:

There are certainly still people rotating out of these products as they are much less efficient and given that others are exiting Bitcoin exposure through GBTC, it is absolutely reasonable that GBTC is at a record discount to net value. GBTC has never been in a situation where there are ready alternative assets that dominate and in absolute terms, this should be the largest sell-off since last fall.

However, financial blog Zerohedge believes that the discount of GBTC relative to the net value of the underlying assets has narrowed, which seems to indicate that the selling pressure has ended. The fact that the Ethereum Trust ETHE, also issued by Grayscale, has turned into a premium relative to the net value of its assets can also prove this.

GBTC is different from traditional ETFs. It is listed on the OTCQX board of the U.S. over-the-counter market (OTC) in the form of a trust. Unlike traditional ETFs that can be redeemed, investors can only sell GBTC in the secondary market to cash out, which will intensify the selling pressure of GBTC when the price of Bitcoin falls.

At the same time, GBTC also faces competition from the Canadian Bitcoin ETF. Although Grayscale applied to the U.S. Securities and Exchange Commission (SEC) in 2016 to issue a Bitcoin ETF, the transaction structure has not yet been approved by U.S. regulators. Grayscale said two weeks ago that it is still "100% committed" to transforming GBTC into an ETF. Fidelity and Valkyrie Digital Assets have also submitted applications for the U.S. version of the Bitcoin ETF. According to media reports, in March this year, the U.S. Securities and Exchange Commission acknowledged that it had received an application for a Bitcoin ETF from investment management company VanEck. If approved, this would be the first U.S. Bitcoin ETF. However, analysts pointed out that it may take another year or two before it is actually listed and traded.

Canada took the lead. The Purpose Bitcoin ETF (code: BTCC) was listed on the Toronto Stock Exchange on February 18 this year, becoming the world's first Bitcoin ETF. The trading volume on the first day of trading alone exceeded 9.65 million shares, ranking among the top 10 in terms of trading volume of all products on the Toronto Stock Exchange that day.