Top Economist Says Bitcoin In Real Trouble Over Grayscale Concerns

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Peter Schiff has continued to push the Bitcoin selling narrative. 

Peter Schiff, the Chief Economist at Euro Pacific Capital, has been actively fostering Bitcoin (BTC), selling a narrative to his 869K Twitter followers. In a recent tweet, Schiff indicated that a new record had been set after Grayscale’s Bitcoin Trust (GBTC) traded its net asset value at a 46% discount. The prominent Bitcoin skeptic noted that something is “going on” with Bitcoin, adding that the world’s largest cryptocurrency seems to be in “real trouble.” 

Following his analysis, Schiff urged his Twitter followers to liquidate their Bitcoin position.

$GBTC is trading at a 46% discount now. New record. Something is definitely going on. #Bitcoin is in real trouble. Get out while you can!

— Peter Schiff (@PeterSchiff) November 18, 2022

Grayscale Funds Trade 40% Lower Than Market Price

As reported yesterday, Grayscale’s GBTC traded at a 43% discount to its market value. At the discount level, GBTC investors were willing to offload their Bitcoin for a price of $9,562 when the asset class was trading at $16,813.

In a similar development, Grayscale’s Ethereum Trust (ETHE) also traded at a 41% discount, at about $718 per ETHE, compared to its market valuation of about $1,219 per ETH. The massive plunge in Grayscale’s GBTC and ETHE values sparked concerns in cryptocurrency as many people tried to figure out why the funds’ low prices.

Speculation suggests the development resulted from growing investors’ fears over the health of Digital Currency Group (DCG), the parent company of Grayscale.

Grayscale dismissed these concerns in an announcement today. According to Grayscale, all digital assets underlying the firm’s investment products are stored in Coinbase Custody and are owned by GBTC alone. “To be perfectly clear: the BTC underlying Grayscale Bitcoin Trust are owned by GBTC and GBTC alone.” 

Grayscale added that the company’s rules prohibit the underlying assets of Grayscale’s investment products from being lent or borrowed.

4) All digital assets that underlie Grayscale’s digital asset products are stored under the custody of Coinbase Custody Trust Company, LLC. Read more from @Coinbase’s CFO Alesia Haas, and CEO of Coinbase Custody Aaron Schnarch: pic.twitter.com/InBP9zPDkC

— Grayscale (@Grayscale) November 18, 2022

Meanwhile, Bitcoin is still trading at around $16,600 at the time of writing. The discounted price of Grayscale’s GBTC did not hurt the value of Bitcoin in the spot market, as many feared.

Schiff’s Bitcoin Skepticism

Schiff is known to capitalize on negative events in cryptocurrency to push the Bitcoin selling narrative. Following the collapse of the FTX exchange that plunged the value of top crypto assets, including Bitcoin, Schiff predicted that Bitcoin still has a long way to fall.

He commented about an old tweet where he warned that the growing economic crisis would prompt Bitcoin investors to sell the asset class to pay food and utility bills. The Bitcoin skeptic also warned that the lion’s share of Bitcoin sales is yet to happen, adding that these huge sales would crash the Bitcoin price further.

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