For the day, Grayscale Bitcoin Trust shares are trading at $7.49. That is a 15.81 percent premium of Bitcoin. It is the first publicly quoted security that is only invested in and only derived from Bitcoin. From the time it was first listed, it has had a high premium. It hit a 2020 top price of 41.42 percent on February 18. It is accentuated when prices of Bitcoin are also high.
The premium has dropped by more than 30 percent since February. This happened after Grayscale registered as a reporting company with the United States Securities and Exchange Commission. It had to do this in order to set up the placement of its shares around that time in February.
As of the end of the day on April 17, Bitcoin was trading at $7,058. It had a 21 percent rally over the past 30 days. A pullback could happen. Its value has increased from the March 13 crash. This is another sign that the market sentiment of Bitcoin is not good. Investors still have a lot of fears. This is showing in the premium.
The drop in the premium between the Grayscale and Bitcoin price could be seen as a sign of a lower appetite from institutional investors. They make up 80 percent of its client base. This perspective is also in agreement with a 44 percent decrease in regulated futures values of CME.
On the other hand, Grayscale has also had interest from investors at a higher level. Although there were two crashes in the past year, it still has $2.1 billion in assets. There are a few other factors that investors should keep in mind. The dynamic of the premium could be changing on a permanent basis.
It is also good to keep in mind that Grayscale offers a periodic placement of private rounds to accredited investors. Past placements were for one year. The filing with the Securities and Exchange Commission could change that. The institutional exposure suggests that the demand for more infrastructure remains high. There is also a diverse and robust level of attention from investors.