GBTC Discount Rate Nears 50%, Crypto Investors Worry About Another Sell-Off

• SEC strikes Back in Grayscale suit over GBTC ETF.
• Market experts are worried that the GBTC discount may cause a sell-off.
• After the FTX collapse, DCG lost $175 million.

Cryptocurrency trust Grayscale (GBTC) is offering a discount of over 50% off. Market experts, crypto analysts and investors are worried that the discount may cause a sell-off. Currently, the GBTC stock is trading at 8.10% lower higher The major events like Genesis seizing withdrawals and GBTC offering discounts up to 45% slightly affected the industry growth. On November 18, Grayscale said they didn’t want to share Proof-of-Reserves with the users.

This month’s Grayscale event became the spotlight for Digital Currency Group (DCG). On November 16, 2022, DCG subsidiary Genesis Global Capital stopped all bitcoin withdrawals and loan applications for their users. Genesis is a crypto trading and lending platform mainly focusing on institutional clients and high-net-worth individuals. 

As per the reports on November 17, 2022, DCG received a document stating that Genesis was undergoing an “ongoing run on deposits.” On November 21, DCG received a $1 billion emergency loan.

Recently, the Digital Currency Group (DCG) CEO Barry Silbert stated that the recent downfall of FTX hurt the company’s growth. After FTX’s collapse, DCG lost $175 million. Barry Silbert stated that DCG joined a growing list of industry leaders trying to settle users’ assets after the downfall of the FTX market price. Genesis ceased withdrawals after the FTX collapse.

On June 29, Grayscale filed a request to convert Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin Exchange Traded Fund (B-ETF) was rejected by the Securities and Exchange Commission (SEC). Due to rejection, Grayscale filed suit against the SEC on the same day. In the filing, Grayscale asked the US Court of Appeals to review the SEC’s order.

CEO of Grayscale, Michael Sonnenshein, stated: “Grayscale supports and believes in the SEC’s mandate to protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation and we are deeply disappointed by and vehemently disagree with the SEC’s decision to continue to deny spot bitcoin ETFs from coming to the US market.”

“Fraud and manipulation may exist and that bitcoin trading on any given exchange may be no more uniquely resistant to fraud and manipulation than other commodity markets,” SEC highlighted in a statement from New York Stock Exchange.

Recently the SEC wrote, “given these prior statements and the risks the commission identified, the commission concluded that NYSE Arca failed to substantiate its assertions regarding Bitcoin’s purportedly novel anti-fraud properties.”

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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