Grayscale's popular Bitcoin Trust has had a challenging last two months as it has been trading at a negative to its net asset value (NAV). The trust has previously been trading at a premium of 15 percent, which attracted many institutional investors.
Just recently, Grayscale saw its premium plummet to a new all-time low of -18.92 percent. Analysts have ascribed the drop in value to the domination of Canadian ETFs in the United States crypto market which has led to a decline in institutional demand for Grayscale's products.sa
Following the historical surge in BTC that saw the value of the asset reaching new highs, Purpose Bitcoin ETF, one of the ETFs in Canada, has seen the value of its assets under management (AUM) hit $1.4 billion, after barely two months of its launch. Though that figure still pales significantly against that of GBTC:s BTCl holdings, at $65 billion.
Another reason for the decline, which started around February, can be attributed to the high management fee being charged by GBTC. Its major competitors, the Canadian ETFs, charge a lot less in management fee – between 0.4-1 percent.
Within this same period, GBTC had sold over 2000 BTCs. while Purpose ETF alone has acquired more than 8,000 bitcoin thanks to surging demand for its product.
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