Some indications show that North America’s first Bitcoin ETF has affected some of the Grayscale market shares. The institutional manager’s Bitcoin Trust is trading at a lower price when compared to spot BTC. This has happened for a whole month, which might mean some new pressure in Canada’s ETF. This is the first time it has happened, and it took the market by surprise.
Glassnode’s Rafael Schultze-Kraft, the data firm’s CTO, explained this new happening yesterday. The expert revealed how Grayscale has been trading at around -6 average throughout the month. Some months ago, Purpose launched the continent’s first Bitcoin ETF, and it was readily accepted amongst both institutional and small-scale investors.
Canada’s BTC ETF could be affecting Grayscale
The chief technical officer drew attention to ETF’s launch around the time Grayscale started witnessing the discounts. The first-ever Bitcoin ETF has gained a lot of attention as it recently accumulated around 16,000 BTC since its launch. The Bitcoin ETF worth around $940 million, showing how far it has grown within a short time. Schultze shared his opinion through Twitter, where he added that Grayscale’s Bitcoin Fund has been flat for some weeks.
He continued by saying that subscribing to the trust doesn’t make sense since the shares are trading at a discount. The CTO opined that the fund might be attracting investors from Grayscale’s trust. Still, Grayscale’s Bitcoin holding remains considerably larger than ETF’s 16,000 BTC. The digital asset manager holds around $657,000 Bitcoin and still has most of the industry’s biggest institutional traders’ attention.
The expert isn’t the only one to share this belief, as some other traders share similar beliefs. Many other traders believe that the newly launched Bitcoin fund is drawing attention from institutional managers like Grayscale. Mike Novogratz revealed that the competition is far tougher for Grayscale as many new opportunities are out there that charge lower for numerous transactions.
Canada’s ETF might be paving the way for other ETFs as Brazil recently approved new ETFs within the region. The country is one of the most crypto-friendly nations globally, and it has been involved in expanding the digital asset industry in numerous ways.
Grayscale’s investment pattern
The nation’s Securities and Exchange Commission approved other crypto ETFs asides from Bitcoin’s ETF, and the crypto-loving residents have welcomed this. Grayscale operates in a simple pattern by allowing institutional investors to get Bitcoin exposure by paying with fiat currency. After they pay the fiat, the manager gives them an equivalent amount of crypto, locked up for some period. After the period, which is usually six months, the sellers can now sell their holdings at the market.
Grayscale has been one of the most preferred platforms for institutional investors as it often trades at a premium when sold at the over-the-counter market. The investors understand that the returns would allow the investors to afford the interest fee and 10% holding fee, which is for the lockup period. The business currently has around $46 billion as AUM, making it one of the largest crypto holders.