Bitcoin continues to unnerve crypto traders this weekend, with analysts giving conflicting predictions as to where the market is heading. Grayscale Investments, a large investment fund, indicated on its Twitter the real losses of the company during the market drawdowns. On May 27, the amount of cryptocurrency it holds has decreased by a whopping $ 2.1 billion, and the company now owns $ 34.1 billion instead of $ 36.2.
However, recent market predictions from Glassnode show that organizations are returning to the Bitcoin market after the crash. Although some analysts point out that the leading cryptocurrency could extend its fall to $ 20,000.
However, an important indicator of institutional interest – the Grayscale Bitcoin Trust (GBTC) share price premium – is rising. And this gives hope.
Grayscale is the largest digital asset management fund; that attracts accredited stock market investors to cryptocurrency through its flagship product Grayscale Bitcoin Trust (GBTC). GBTC has become especially popular with institutional clients in recent months, it allows serious people with big money to enter the cryptocurrency market.
Investing in GBTC has long been a popular pastime for many organizations around the world. GBTC assets are traded on over-the-counter markets. Accredited investors can buy these securities based on the net worth of the fund.
The lion’s share of assets still falls on the Bitcoin trust – 83%. Also, an investment product based on Ethereum is popular among investors – 14%.
The Grayscale Premium, or premium, shows the difference in the value of an asset on the open market and in the GBTC fund. A rising Grayscale Premium indicates institutional investor interest in buying Bitcoin, while a decline indicates a drop in demand and may indicate selling.
Grayscale Bitcoin Trust raised over 50,000 BTC during January 2021 and the first half of February 2021. During this time, GBTC was trading at a premium of 10-20%, demonstrating growing institutional interest.
In the first half of February, the premium fell below 10%. GBTC fell below spot prices. But the Bitcoin rate rose from $ 30,000 to almost $ 65,000 by April. By then, the GBTC premium had dropped below zero.
On May 13, ahead of the fall in Bitcoin, which was triggered by Elon Musk’s tweet, the GBTC premium reached -21.23%, according to research by Glassnode. The largest negative premium in GBTC history indicated a significant decline in institutional demand. The dramatic decline in the asset price on May 19 increased the premium. The indicator has recovered to -3.8%, which suggests that institutional investors are returning to the Bitcoin market.
A similar trend was demonstrated by the Canadian exchange-traded fund Purpose Bitcoin ETF. Analysts at Glassnode noted that the Bitcoin price correction led to a significant recovery in institutional investor demand at the end of May.
This contrast suggests that institutions have not abandoned the crypto market.
Moreover, the GBTC and Purpose ETF products are showing signs of recovery despite falling prices, giving the first signs of renewed institutional interest.