Grayscale Bitcoin Trust falls as cryptocurrencies slide again

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Nov 16 (Reuters) – Grayscale Bitcoin Trust (GBTC.PK)the world’s largest bitcoin fund, fell nearly 7% on Wednesday as investors dumped more digital assets after last week’s high-profile takedown of crypto exchange FTX.

Crypto investment bank Genesis Global Trading said in a tweet that it was temporarily suspending redemptions and new lending following the collapse of FTX, which gave cryptocurrencies another hammer this year.

Genesis, the latest company to be hit by the FTX turmoil, is owned by Digital Currency Group (DCG), which is also Grayscale’s parent company.

DCG tweeted that the freeze on Genesis lending business had no impact on the company and its wholly owned subsidiaries.

Grayscale said its products would operate as usual and its underlying assets were unaffected.

Grayscale Bitcoin Trust’s net asset value discount, which hit an all-time low of 41% last week, is now 37%. The shares have not traded at a premium since March 2021, according to data from Coinglass.

The trust is a closed-end fund, whose short-term price is determined by supply, demand and market sentiment, unlike an exchange-traded fund which generally trades based on its value.

In June, Grayscale sued the U.S. Securities and Exchange Commission for rejecting the digital asset manager’s proposal to convert the bitcoin trust into a bitcoin cash exchange-traded fund.

The Grayscale Bitcoin Fund, which manages $10.7 billion worth of bitcoins, has fallen about 75% in the past 12 months.

Ethereum trust in grayscale (ETHE.PK), which has $3.8 billion in assets under management, has lost 81% over the past year. By comparison, bitcoin, which was down 2% at $16,505 on Wednesday, has fallen 72% over the past year.

Reporting by Medha Singh and Lisa Pauline Mattackal in Bengaluru

Our standards: The Thomson Reuters Trust Principles.

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